Rocket Companies, a Detroit-based fintech platform, has announced an agreement to acquire Redfin, a digital real estate brokerage. The transaction is valued at $1.75 billion in equity and will be conducted as an all-stock deal. Each share of Redfin common stock will be exchanged for 0.7926 shares of Rocket Companies Class A common stock.
"Rocket and Redfin have a unified vision of a better way to buy and sell homes," said Varun Krishna, CEO of Rocket Companies. "Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers."
Founded in 2004, Redfin operates a top-three home search platform with over one million listings and employs more than 2,200 agents. The merger aims to combine Redfin's home search capabilities with Rocket's mortgage services.
"Rocket and Redfin’s approaches to lending and brokerage service have always been two halves of one vision to make the whole home-buying process magical," stated Glenn Kelman, CEO of Redfin.
The acquisition is expected to introduce more consumers to the Rocket ecosystem through Redfin's monthly visitors and agent network across 42 states. It is also anticipated to drive Rocket’s purchase mortgage growth by matching homebuyers with agents and loan officers from both companies.
The combined entity plans to leverage AI technology using over 14 petabytes of data for personalized consumer experiences. Rocket expects significant synergies amounting to over $200 million by 2027.
The transaction has received approval from both companies' boards but awaits shareholder approval from Redfin and other regulatory conditions. It is projected to close in mid-2025.
Upon completion, current shareholders of Rocket Companies will own approximately 95% of the combined company while Redfin shareholders will hold about 5%. Glenn Kelman is expected to continue leading the Redfin business under the umbrella of Rocket Companies.
Morgan Stanley & Co. LLC serves as financial advisor for Rocket Companies while Goldman Sachs & Co LLC advises Redfin on this transaction.
A conference call discussing the transaction will be held by Rocket Companies today at 8:00 a.m. ET via their investor relations website.