Rocket Companies to buy Mr Cooper Group for $9.4 billion in mega US real-estate deal
Fintech firm Rocket Companies said on Monday it would buy home loan services provider Mr. Cooper Group for $9.4 billion, its second big deal this month as it looks to broaden its mortgage-related offerings on its online platform.
Shares of Mr. Cooper jumped about 27% to $132.1 in premarket trading but were still trading well below the offer price of $143.33. Rocket was down 4.4%.
The deal will help add nearly 7 million clients, drive higher loan volume and recurring revenue, while lowering client acquisition costs, Rocket said.
Earlier this month, Rocket, whose main business is mortgage lending, acquired real estate listing platform Redfin in an all-stock deal valued at $1.75 billion.
The deal to buy Mr. Cooper is expected to generate an additional $100 million in pretax revenue and potentially save $400 million from streamlining operations, corporate expenses and technology investments.
The all-stock transaction, which is expected to close in the fourth quarter, is expected to add to Rocket's adjusted earnings per share immediately after closing.
After the completion of the deal, Mr. Cooper CEO Jay Bray will lead Rocket Mortgage, the company's flagship business.
Reporting by Aishwarya Jain and Nathan Gomes in Bengaluru; Editing by Shilpi Majumdar and Anil D'Silva