By Mackenzie Tatananni
Rocket Cos. said Monday it reached an agreement to buy the digital real estate brokerage Redfin.
Rocket will pay $12.50 a share to acquire Redfin in an all-stock transaction. The deal, which values Redfin at $1.75 billion, is expected to close in the second or third quarter of 2025.
Shares of Redfin surged 70% to $9.92 on Monday. Rocket was down 14%.
Rocket said the deal would connect its mortgage products to Redfin's nearly 50 million monthly visitors, improving the search and financing process in a way that "removes friction, reduces costs and increases value to American homebuyers."
Redfin was founded in 2004. The company filed a patent the following year for an "online marketplace for real estate transactions." It styles itself as a self-service home search platform, offering users access to local real estate agents and displaying homes for sale on an interactive map.
Redfin CEO Glenn Kelman described Redfin and Rocket's approaches to lending and brokerage as "two halves of one vision."
Real estate could be much better with artificial intelligence guiding customers "all the way home, through the sale, the loan and then a lifetime of accumulating equity and wealth," Kelman said.
Rocket also said it had agreed to simplify its organizational and capital structure. The company said it would do away with its so-called Up-C corporate structure, which is used to take a private company public, and reduce its classes of common stock to two from four.
In connection with that move, Rocket declared a special cash dividend of 80 cents per share of Class A common stock, to be paid on April 3.
The Detroit-based holding company is the parent of Rocket Mortgage and Rocket Loans. Redfin, which went public in 2017, will remain a public company following the acquisition.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
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(END) Dow Jones Newswires
March 10, 2025 10:53 ET (14:53 GMT)
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