March 31 (Reuters) - Rocket Companies said on Monday it would buy home loan service provider Mr Cooper Group for $9.4 billion, boosting its mortgages business in its second big deal this month to take
advantage of a rebound in U.S. housing demand.
Better home inventory and recent declines in long-term bond yields are bringing
back potential buyers to the housing market after years of struggle due to high interest rates and prices.
Earlier this month, Rocket acquired real estate listing firm Redfin in an all-stock deal
valued at $1.75 billion.
Rocket Companies has offered 11 of its shares for each
Mr Cooper common stock held. This represents $143.33 per share based on Friday's closing price,
a premium of about 37%.
Shares of Mr Cooper, which reported an annual revenue of about $2.23 billion in 2024, jumped
more than 18% in morning trading, while Rocket fell 7.5%.
The deal will help add nearly 7 million clients, increase loan volume and drive more recurring
revenue, while lowering client acquisition costs,
Rocket said.
The Mr Cooper deal is expected to generate an additional $100 million in pre-tax revenue and potentially save $400
million from streamlining operations, corporate expenses and technology investments.
The 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, Anil D'Silva and Sriraj Kalluvila)
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