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Redfin "for sale" sign stands in front of a house on Oct. 28, 2020, in Seattle. (AP Photo/Elaine Thompson, File)
Mortgage lender Rocket Cos. is acquiring online real estate brokerage Redfin in an all-stock deal worth $1.75 billion. The transaction gives Rocket access to over 2,000 agents across 42 states and Redfin's popular listings platform, which attracts nearly 50 million visitors monthly. Shares of Seattle-based Redfin surged 68.5% to $9.81 after the announcement.
The acquisition is expected to save Rocket $140 million by eliminating redundant operations and expenses. It also aims to boost revenue by more than $60 million by connecting clients with Redfin's agents, potentially leading to additional real estate services like title insurance and loan servicing.
Redfin CEO Glenn Kelman will remain at the helm of the brokerage, reporting to Rocket's CEO. Under the deal, each share of Redfin common stock will be exchanged for 0.7926 shares of Rocket Cos. Class A common stock, a premium of 63% over Redfin's average stock price.
Once finalized, current Rocket shareholders will own around 95% of the combined company, while Redfin shareholders will hold about 5%. The companies expect the transaction to close in the second or third quarter this year after receiving approval from Redfin shareholders.
