DETROIT (WWJ) -- Detroit-based mortgage company Rocket is buying a competitor in a huge, all-stock deal.
The acquisition of Mr. Cooper is valued at $9.4 billion, and comes just weeks after acquiring real estate listing company Redfin.
Rocket said in a news release Monday that bringing Mr. Cooper Group Inc. into the fold will create a business representing one in every six mortgages in the United States and give it almost 7 million additional clients.
“By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care," Mr. Cooper Chairman and CEO Jay Bray, who will become president and CEO of Rocket Mortgage, said in a statement.
The combination boost loan volume and long-term client relationships, while also offering greater recurring revenue and lowering client acquisition costs, the company said.
Mr. Cooper shareholders will receive a fixed exchange ratio of 11 Rocket shares for each share of Mr. Cooper common stock. Mr. Cooper is based in Coppell, Texas. Rocket shareholders will own approximately 75% of the combined company, while Mr. Cooper stockholders will own about 25%. The combined company's board will have 11 members, with nine being from Rocket and two from Mr. Cooper.
Earlier this month Rocket, based in Detroit, announced that it was buying Redfin — a well-known discount real estate brokerage — in an all-stock deal worth $1.75 billion.
Redfin, founded in 2004, has more than 1 million for sale and rental listings on its online platform.
This comes after National Association of Realtors announced this month that existing home sales rose 4.2% in February from January to a seasonally adjusted annual rate of 4.26 million units. That was in part, Rocket says, thanks to easing mortgage rates and more properties on the market encouraging home shoppers.
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