Mortgage giant announces blockbuster deal
Rocket Companies is acquiring real estate listing platform Redfin in a deal worth $1.75 billion, the mortgage lending giant has revealed.
The move will see Rocket pay $12.50 per share for the platform, which features over a million for sale and rental listings and a real estate brokerage with well over 2,000 agents. Rocket expects the deal to close in either the second or third quarter of this year, with current Redfin chief executive officer Glenn Kelman to continue at the helm.
In a statement, Rocket’s chief executive officer Varun Krishna said the two companies had a “unified vision” of improving the real estate purchase and sales processes and touted the potential of their “leading technology” to remove friction and reduce costs in homebuying.
The company also said the acquisition would drive purchase mortgage growth at Rocket, expecting the combined company to fund more than $200 million in run-rate synergies in the next two years and over $60 million in revenue synergies by pairing Rocket’s financing clients with Redfin real estate agents.
Redfin’s sites generate nearly 50 million visitors each month, while Rocket’s press release also noted that Redfin agents rank in the top 1% of agents working at any nationwide brokerage.
The move arrives less than a week after Rocket announced that it was winding down Rocket Mortgage Canada, reflecting its desire to concentrate solely on the US market.
“The decision aligns with our parent, Rocket Companies, focusing on growing in the American housing market – where it has served clients for nearly 40 years,” the company said.
Redfin shares soared in the wake of the agreement being announced, jumping by around 80%, although Rocket’s saw a dip of about 8%.
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