Rocket Buys Mortgage Firm Mr. Cooper in $9.4 Billion Deal
Rocket Companies is continuing its aggressive expansion in the real estate space with the announcement of a $9.4 billion all-stock acquisition of Mr. Cooper Group Inc., one of its largest rivals in the mortgage industry. The move comes just weeks after Rocket revealed a $1.75 billion all-stock deal to acquire real estate listing platform Redfin.
The combination of Rocket and Mr. Cooper will result in a mortgage behemoth servicing nearly one in every six U.S. home loans, with close to 7 million additional clients added to Rocket’s base. The merger is expected to significantly boost Rocket’s loan volumes and reduce the cost of acquiring new customers.
“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,” said Mr. Cooper Chairman and CEO Jay Bray. Bray will become president and CEO of Rocket Mortgage following the merger and report to Rocket Companies CEO Varun Krishna.
Under the terms of the deal, Mr. Cooper shareholders will receive 11 shares of Rocket stock for each Mr. Cooper share, giving Rocket shareholders about 75% ownership of the combined company, and Mr. Cooper shareholders the remaining 25%. The new board will consist of 11 members—nine from Rocket and two from Mr. Cooper.
This deal arrives at a time when the U.S. housing market is slowly attempting a recovery after a two-year slump, driven by elevated mortgage rates and record-high home prices. In February, existing home sales rose 4.2% month-over-month, buoyed by slight drops in mortgage rates and increased housing inventory.
With this latest acquisition, Rocket is working to reshape itself into a comprehensive real estate ecosystem, covering everything from listings (via Redfin) to mortgage origination and servicing (via Mr. Cooper). The strategy appears to be aimed at giving homebuyers a seamless, end-to-end experience during one of life’s most complex and stressful processes.
Mr. Cooper, headquartered in Coppell, Texas, will become part of Rocket’s growing empire, which is based in Detroit. The merger marks a bold bet on the eventual rebound of the housing market and underscores Rocket’s ambition to become the Amazon of homeownership—a one-stop shop from search to closing.
