Rocket Companies (NYSE: RKT) has announced its agreement to acquire Redfin (NASDAQ: RDFN), a leading digital real estate brokerage, in an all-stock transaction valued at $1.75 billion of equity. This acquisition is expected to bring significant strategic and financial benefits to Rocket Companies, with the combined entity aiming to introduce more consumers to the Rocket ecosystem and drive purchase mortgage growth.
Rocket Companies expects to achieve more than $200 million in run-rate synergies by 2027, including approximately $140 million in cost synergies from rationalization of duplicative operations and other costs. Additionally, Rocket anticipates more than $60 million in revenue synergies from pairing the company’s financing clients with Redfin real estate agents and from driving clients working with Redfin agents to Rocket’s mortgage, title, and servicing offerings. Furthermore, the transaction is expected to be accretive to Rocket Companies’ adjusted earnings per share by the end of 2026.
Under the terms of the agreement, each share of Redfin common stock will be exchanged for a fixed ratio of 0.7926 shares of Rocket Companies class A common stock, representing a premium of 63% over the volume-weighted average price of Redfin’s common stock for the 30 days ending March 7, 2025. Upon completion of the transaction, current Rocket Companies shareholders will own approximately 95% of the combined company on a fully diluted basis, while Redfin shareholders will own approximately 5%.
The transaction, which has been approved by the boards of directors of both Rocket Companies and Redfin, is expected to close in the second or third quarter of 2025, subject to approval by Redfin shareholders and the satisfaction of other closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Additionally, Rocket Companies announced that it will collapse its current “up-C” structure, eliminate its high-vote/low-vote structure, and reduce its classes of common stock from four to two. As part of this organizational and capital structure simplification, Rocket Companies declared a special cash dividend of $0.80 per share of class A common stock to be paid on April 3, 2025, to holders of record as of the close of business on March 20, 2025.
The market has reacted to these announcements by moving the company's shares -17.1% to a price of $13.08. For more information, read the company's full 8-K submission here.
