FinTech News
Rocket Companies Announces Acquisition of Redfin
A FinTech giant plans to purchase a popular real estate brokerage site.
About the acquisition:
Detroit-based Rocket Companies has announced its acquisition of Redfin. The all-stock transactions will value each Redfin share at $12.50 for a total of $1.75 billion. As of this writing, $RDFN is trading near $10 per share, which is up from nearly $6 per share the week prior. This transaction has been approved by the Boards of both companies and is expected to close in Q2 or Q3 of this year, upon approval of Redfin shareholders and other closing conditions.
Redfin is among the top three home search platforms with nearly 50 million monthly visitors. The site boasts more than 1 million listings (including for-sale and rental properties).
As for Rocket, the company includes such platform as Rocket Mortgage, Rocket Loans, and the personal finance app Rocket Money (formerly Truebill prior to being acquired by Rocket). With the purchase of Redfin, Rocket expects to reach more than $200 million in run-rate synergies by 2027. This includes $140 million in cost savings thanks to those synergies and elimination of redundant operations.
What they’re saying:
Announcing the acquisition, Rocket Companies CEO Varun Krishna said, “Rocket and Redfin have a unified vision of a better way to buy and sell homes. 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.”
Meanwhile, Redfin CEO Glenn Kelman — who will continue to lead Redfin post-acquision, reporting to Krishna — stated, “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. We want a customer to be able to check her phone to find out what she can afford, see which homes are just right for her, schedule a tour with a local, expert Redfin agent, and get pre-qualified for a loan, all in a matter of minutes.”
Kelman also commented on the vision for the combined company’s future, noting, “Varun and I see how much better real estate could be when AI guides customers not just through that first step in their search, but all the way home, through the sale, the loan and then a lifetime of accumulating equity and wealth.”
My thoughts:
As Rocket lays out, the synergistic opportunities that a purchase of Redfin provides them make a ton of sense. Moreover, with a boost from Rocket, Redfin has a chance to better compete with Zillow. Barring any regulatory scrutiny or other hiccups, this deal could be a big win for all involved.
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