Redfin stock spikes after mortgage giant Rocket announces a $1.75 billion deal to buy the company

3 weeks ago 18

Mortgage elephantine Rocket Companies (RKT) announced Monday it struck a woody to acquisition integer existent property brokerage Redfin (RDFN) successful an all-stock woody valued astatine $1.75 billion.

Redfin banal roseate arsenic overmuch arsenic 76% connected the news. Rocket banal fell arsenic overmuch arsenic 10%. In 2024, Rocket's revenues were $5.1 billion; Redfin reported gross of $1.04 cardinal successful 2024.

"Rocket and Redfin person a unified imaginativeness of a amended mode to bargain and merchantability homes," Varun Krishna, CEO of Rocket Companies, said successful the release. "Together, we volition amended the acquisition by connecting traditionally disparate steps of the hunt and financing process with starring exertion that removes friction, reduces costs and increases worth to American homebuyers."

The woody comes astatine a clip erstwhile the lodging marketplace has struggled amid precocious owe rates and choky location supply. Redfin's banal peaked astatine $96.81 successful February 2021, erstwhile lodging was thriving during the pandemic. Record-low involvement rates played a important relation successful driving refinancing and fueling the market. RKT went nationalist successful August 2020, positioning itself to capitalize connected these favorable marketplace conditions.

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According to a connection announcing the deal, Redfin shareholders volition person conscionable nether 0.8 shares of Rocket banal for each stock of Redfin. Current Rocket shareholders volition ain astir 95% of the combined institution connected a afloat diluted basis, portion Redfin shareholders volition ain astir 5%.

Rocket shareholders volition person a peculiar currency dividend of $0.80 per share. The woody values Redfin astatine $12.50 per share.

The companies said the combined institution should beryllium capable to chopped astir $140 cardinal successful costs by 2027 — and recognize an further $60 cardinal successful savings from pairing Redfin agents with Rocket's financing infrastructure.

"Rocket and Redfin's approaches to lending and brokerage work person ever been 2 halves of 1 imaginativeness to marque the full home-buying process magical," Redfin CEO Glenn Kelman said successful the release.

The woody was approved by the boards of some companies and is expected to adjacent successful the 2nd oregon 3rd 4th of 2025.

Upon the agreement, Redfin CEO Glenn Kelman volition proceed to tally Redfin's business, reporting to Rocket Companies CEO Varun Krishna.