- Most-visited real estate brokerage website joins with largest
mortgage lender
- Connects Redfin's nearly 50 million monthly visitors to
Rocket's mortgage products
- Rocket Companies to collapse "Up-C" structure and declares a
special cash dividend of $0.80 per
share of Class A common stock to be paid on April 3
- Rocket to host conference call and webcast today at
8:00 a.m. ET
DETROIT and SEATTLE, March 10,
2025 /PRNewswire/ -- Rocket Companies
(NYSE: RKT), the Detroit-based fintech platform consisting of
mortgage, real estate and personal finance businesses, today
announced it has entered into an agreement to purchase Redfin
(NASDAQ: RDFN), a leading digital real estate brokerage, in an
all-stock transaction for a value of $12.50 per Redfin share, or $1.75 billion of equity value.
Founded in 2004, Redfin is one of America's most recognized real
estate brands, operating a top-three home search platform with more
than 1 million for-sale and rental listings and a tech-powered
brokerage of more than 2,200 agents.
"Rocket and Redfin have a unified vision of a better way to buy
and sell homes," said Varun Krishna,
CEO of Rocket Companies. "Together, we will improve the experience
by connecting traditionally disparate steps of the search and
financing process with leading technology that removes friction,
reduces costs and increases value to American homebuyers."
For 40 years, Rocket's digital platform has grown to provide
home financing in all 50 states across 3,000+ counties and
parishes. By combining Redfin's home search and real estate agent
network with Rocket's mortgage origination and servicing
capabilities, the company envisions a more seamless experience from
search to close, to servicing and future transactions.
"Rocket and Redfin's approaches to lending and brokerage service
have always been two halves of one vision to make the whole
home-buying process magical," said Glenn
Kelman, CEO of Redfin. "We want a customer to be able to
check her phone to find out what she can afford, see which homes
are just right for her, schedule a tour with a local, expert Redfin
agent, and get pre-qualified for a loan, all in a matter of
minutes. Varun and I see how much better real estate could be when
AI guides customers not just through that first step in their
search, but all the way home, through the sale, the loan and then a
lifetime of accumulating equity and wealth."
Significant Strategic and Financial Benefits
Bringing Rocket Companies and Redfin together is expected
to:
- Introduce more consumers to the Rocket ecosystem: Rocket
Companies will benefit from Redfin's nearly 50 million monthly
visitors, 1 million active purchase and rental listings and staff
of 2,200+ real estate agents across 42 states - with Redfin agents
ranking in the top 1% of agents working at any nationwide
brokerage.
- Drive Rocket's purchase mortgage growth: The transaction
will generate significant revenue synergies across search, real
estate brokerage, mortgage origination, title and servicing. Rocket
will match homebuyers with the best real estate agents and the best
loan officers across the combined companies. In 2024, Rocket saw an
8% year-over-year increase in purchase market share and aims to
further accelerate growth through this acquisition.
- AI, technology and personalization at scale: With more
than 14 petabytes of combined data, Rocket gains unparalleled
consumer insights, including information about homebuyers, seller
and agents across a data repository of 100 million properties. This
data will strengthen Rocket's AI models enabling easier and more
personalized and automated consumer experiences.
- Achieve significant synergies and earnings accretion:
Rocket expects the combined company to achieve more than
$200 million in run-rate synergies by
2027, including approximately $140
million in cost synergies from rationalization of
duplicative operations and other costs. In addition, Rocket expects
more than $60 million in revenue
synergies from pairing the company's financing clients with Redfin
real estate agents, and from driving clients working with Redfin
agents to Rocket's mortgage, title and servicing offerings. The
transaction is expected to be accretive to Rocket Companies'
adjusted earnings per share by the end of 2026. Rocket Companies
will maintain its strong balance sheet and conservative leverage
profile upon close of the transaction.
Under the terms of the agreement, each share of Redfin common
stock will be exchanged for a fixed ratio of 0.7926 shares of
Rocket Companies Class A common stock, which represents a premium
of 63% over the volume weighted average price (VWAP) of Redfin's
common stock for the 30 days ending March 7,
2025. Upon completion of the transaction, current Rocket
Companies shareholders will own approximately 95% of the combined
company on a fully diluted basis, while Redfin shareholders will
own approximately 5%.
Timing and Approvals
The transaction has been approved by the Boards of Directors of
both Rocket Companies and Redfin. It is expected to close in the
second or third quarter of 2025, subject to approval by Redfin
shareholders and the satisfaction of other closing conditions,
including the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
Upon closing of the transaction, it is expected that Redfin CEO
Glenn Kelman will continue to lead
the Redfin business, reporting to Rocket Companies' CEO
Varun Krishna.
Advisors
Morgan Stanley & Co. LLC is acting as financial advisor and
Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal
counsel to Rocket Companies. Goldman Sachs & Co LLC is acting
as financial advisor and Fenwick & West LLP is acting as
legal counsel to Redfin.
Transaction Conference Call
Rocket Companies will conduct a conference call today at
8:00 a.m. ET to discuss the
transaction. A live webcast of the event will be available on the
investor relations section of Rocket Companies' website
at ir.rocketcompanies.com. A replay of the webcast will be
available for all stakeholders on the investor relations website
following the conclusion of the event.
Update to Rocket Companies Up-C structure
Rocket Companies also announced it has entered into an agreement
to simplify its organizational and capital structure. Under the
agreement, Rocket Companies will collapse its current "Up-C"
structure, eliminate its high-vote / low-vote structure and reduce
its classes of common stock from four to two (the "Up-C Collapse").
Following the Up-C Collapse, the public stockholders will continue
to hold their current shares of common stock, while Dan Gilbert and the other stockholders of Rock
Holdings Inc. (RHI) will hold shares of common stock directly in
Rocket Companies, instead of through RHI, and will no longer hold
limited liability company units of Rocket, LLC, the principal
operating subsidiary of Rocket Companies. Additionally, shares of
common stock to be directly held by Dan
Gilbert and other stockholders of RHI will carry one vote
per share, as opposed to the 10 votes per share of the Class D
common stock they currently hold, and will be subject to a lock up.
The Up-C Collapse will simplify Rocket's organizational structure,
enhancing equity liquidity, improving its ability to use its common
stock as acquisition currency in acquisition transactions,
including the acquisition of Redfin, and creating a clearer
corporate profile.
In connection with the Up-C Collapse, the Rocket Companies'
board of directors authorized and declared a cash dividend of
$0.80 per share to the holders of
Rocket's Class A common stock (the "Special Dividend"). The Special
Dividend will be paid on April 3,
2025, to holders of the Class A common stock of record as of
the close of business on March 20,
2025.
Additional Resources
Associated presentation materials regarding the transaction are
available on the investor relations section of each company's
website.
Important Information for Investors and Stockholders
In connection with the proposed transaction, Rocket plans to
file with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-4 (the "Registration Statement"),
containing a prospectus of Rocket and a proxy of Redfin (the "Proxy
Statement/Prospectus"). After the Registration Statement has been
declared effective by the SEC, the Proxy Statement/Prospectus will
be delivered to stockholders of Redfin. Investors and
securityholders of Rocket and Redfin are urged to read the
Registration Statement and any other relevant documents filed with
the SEC, including the Proxy Statement/Prospectus that will be part
of the Registration Statement when they are available because they
will contain important information about Rocket, Redfin, the
proposed transaction and related matters. Investors and
securityholders of Rocket and Redfin will be able to obtain copies
of the Registration Statement and the Proxy Statement/Prospectus,
when they become available, as well as other filings with the SEC
that will be incorporated by reference into such documents,
containing information about Rocket and Redfin, without charge, at
the SEC's website (http://www.sec.gov). Copies of the documents
filed with the SEC by Rocket will be available free of charge under
the SEC Filings heading of the Investor Relations section of
Rocket's website at ir.rocketcompanies.com. Copies of the documents
filed with the SEC by Redfin will be available free of charge under
the Financials & Filings heading of the Investor Relations
section of Redfin's website investors.redfin.com.
No Offer or Solicitation
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the Solicitation
Rocket and Redfin and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from
Redfin's stockholders in respect of the transaction under the rules
of the SEC. Information regarding Rocket's directors and executive
officers is available in Rocket's Annual Report on Form 10-K for
the year ended December 31, 2024 and
Rocket's proxy statement, dated April 26,
2024, for its 2024 annual meeting of stockholders, which can
be obtained free of charge through the website maintained by the
SEC at http://www.sec.gov. Any changes in the holdings of the
Rocket's securities by Rocket's directors or executive officers
from the amounts described in Rocket's 2024 proxy statement have
been reflected in Statements of Change in Ownership on Form 4 filed
with the SEC subsequent to the filing date of Rocket's 2024 proxy
statement and are available at the SEC's website at www.sec.gov.
Information regarding Redfin's directors and executive officers is
available in Redfin's Annual Report on Form 10-K for the year ended
December 31, 2024 and Redfin's proxy
statement, dated April 25, 2024, for
its 2024 annual meeting of stockholders, which can be obtained free
of charge through the website maintained by the SEC at
http://www.sec.gov. Any changes in the holdings of Redfin's
securities by Redfin's directors or executive officers from the
amounts described in Redfin's 2024 proxy statement have been
reflected in Statements of Change in Ownership on Form 4 filed with
the SEC subsequent to the filing date of Redfin's 2024 proxy
statement and are available at the SEC's website at
www.sec.gov. Additional information regarding the interests
of such participants will be included in the Registration Statement
containing the Proxy Statement/Prospectus and other relevant
materials to be filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking
Information
This communication contains statements herein regarding the
proposed transaction between Rocket and Redfin; future financial
and operating results; benefits and synergies of the transaction;
future opportunities for the combined company; the conversion of
equity interests contemplated by the Agreement and Plan of Merger
(the "Merger Agreement") entered into by Rocket and Redfin on
March 9, 2025; the issuance of common
stock of Rocket contemplated by the Merger Agreement; the expected
filing by Rocket with the SEC of the Registration Statement and the
Proxy Statement/Prospectus; the expected timing of the closing of
the proposed transaction; the ability of the parties to complete
the proposed transaction considering the various closing conditions
and any other statements about future expectations that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. All statements in this communication, other than
statements of historical fact, are forward-looking statements that
may be identified by the use of words "anticipate," "believe,"
"could," "estimate," "expect," "intend," "may," "plan,"
"potential," "predict," "project," "should," "target," "will,"
"would" and, in each case, their negative or other various or
comparable terminology. Such forward-looking statements are based
upon current beliefs, expectations and discussions related to the
proposed transaction and are subject to significant risks and
uncertainties that could cause actual results to differ materially
from the results expressed in such statements.
Risks and uncertainties include, among other things, (i) the
risk that the proposed transaction may not be completed in a timely
basis or at all, which may adversely affect Rocket's and Redfin's
businesses and the price of their respective securities; (ii) the
potential failure to receive, on a timely basis or otherwise, the
required approvals of the proposed transaction, including
stockholder approval by Redfin's stockholders, and the potential
failure to satisfy the other conditions to the consummation of the
proposed transaction; (iii) the effect of the announcement,
pendency or completion of the proposed transaction on each of
Rocket's or Redfin's ability to attract, motivate, retain and hire
key personnel and maintain relationships with lead agents, partner
agents and others with whom Rocket or Redfin does business, or on
Rocket's or Redfin's operating results and business generally; (iv)
that the proposed transaction may divert management's attention
from each of Rocket's and Redfin's ongoing business operations; (v)
the risk of any legal proceedings related to the proposed
transaction or otherwise, including the risk of stockholder
litigation in connection with the proposed transaction, or the
impact of the proposed transaction thereupon, including resulting
expense or delay; (vi) that Rocket or Redfin may be adversely
affected by other economic, business and/or competitive factors;
(vii) the occurrence of any event, change or other circumstance
that could give rise to the termination of the Merger Agreement,
including in circumstances which would require payment of a
termination fee; (viii) the risk that restrictions during the
pendency of the proposed transaction may impact Rocket's or
Redfin's ability to pursue certain business opportunities or
strategic transactions; (ix) the risk that the anticipated benefits
and synergies of the proposed transaction may not be fully realized
or may take longer to realize than expected; (x) the impact of
legislative, regulatory, economic, competitive and technological
changes; (xi) risks relating to the value of Rocket securities to
be issued in the proposed transaction; (xii) the risk that
integration of the Rocket and Redfin businesses post closing may
not occur as anticipated or the combined company may not be able to
achieve the growth prospects expected from the transaction; and
(xiii) the effect of the announcement, pendency or completion of
the proposed transaction on the market price of the common stock of
each of Rocket and Redfin.
These risks, as well as other risks related to the proposed
transaction, will be described in the Registration Statement that
will be filed with the SEC in connection with the proposed
transaction. While the list of factors presented here and the list
of factors to be presented in the Registration Statement are
considered representative, no such list should be considered to be
a complete statement of all potential risks and uncertainties.
Additional factors that may affect future results are contained in
each company's filings with the SEC, including each company's most
recent Annual Report on Form 10-K, as it may be updated from time
to time by quarterly reports on Form 10-Q and current reports on
Form 8-K, all of which are available at the SEC's website
http://www.sec.gov. The information set forth herein speaks
only as of the date hereof, and any intention or obligation to
update any forward looking statements as a result of developments
occurring after the date hereof is hereby disclaimed.
About Rocket Companies
Founded in 1985, Rocket Companies (NYSE: RKT) is a Detroit-based fintech platform including
mortgage, real estate and personal finance businesses: Rocket
Mortgage, Rocket Homes, Rocket Close, Rocket Money and Rocket
Loans.
With more than 65 million call logs each year, 10 petabytes of
data and a mission to Help Everyone Home, Rocket Companies is well
positioned to be the destination for AI-fueled home ownership.
Known for providing exceptional client experiences, J.D. Power has
ranked Rocket Mortgage #1 in client satisfaction for primary
mortgage origination and mortgage servicing a total of 22 times –
the most of any mortgage lender.
For more information, please visit our Corporate
Website or Investor Relations Website.
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, and title insurance services. We run the
country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Our rentals business
empowers millions nationwide to find apartments and houses for
rent. Since launching in 2006, we've saved customers more than
$1.6 billion in commissions. We serve
approximately 100 markets across the U.S. and Canada and employ over 4,000 people.
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SOURCE Rocket Companies, Inc.
