- Ready Capital and Broadmark Realty Capital have announced a merger. These are the details.
Ready Capital Corporation (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services small-to-medium balance commercial loans, and Broadmark Realty Capital (NYSE: BRMK), a specialty real estate finance company that specializes in originating and servicing residential and commercial construction loans, announced that they have entered into a definitive merger agreement pursuant to which Broadmark will merge with Ready Capital. And upon the completion of the merger, Ready Capital is expected to have a pro forma equity capital base of $2.8 billion.
Under the terms of the merger agreement, each share of Broadmark common stock will be converted into 0.47233 shares of Ready Capital common stock or a total of approximately 63 million shares of Ready Capital common stock. And the respective closing stock prices for Ready Capital and Broadmark on February 24, 2023, imply an offer price of $5.90 per Broadmark share, representing a 41% premium or approximately 0.85x tangible book value as of December 31, 2022.
Upon the closing of the merger, Ready Capital stockholders are expected to own approximately 64% of the combined company’s stock while Broadmark stockholders are expected to own approximately 36% of the combined company’s stock. Plus Ready Capital will assume Broadmark’s outstanding senior unsecured notes.
Based on the closing price of Ready Capital’s common stock on February 24, 2023, the market capitalization of the combined company is approximately $2.2 billion. And the combined company will operate under the name “Ready Capital Corporation” and its shares will trade on the NYSE under the existing ticker symbol “RC”. Waterfall Asset Management, LLC will continue to manage the combined company.
Upon completion of the merger, Ready Capital’s Chairman, Chief Executive Officer and Chief Investment Officer, Thomas Capasse, will continue to lead the company and Ready Capital executives Jack Ross, Andrew Ahlborn, Gary Taylor and Adam Zausmer will remain in their current roles. And the combined company will remain headquartered in New York, New York. The Board of the combined company is expected to increase by three Broadmark-designated directors to twelve directors.
“We are excited about the continued growth of our commercial real estate investment platform with the Broadmark transaction and believe it will provide strategic and financial benefits to all shareholders. We believe our asset management and workout experience, along with the synergies we expect to realize, position us well over the long-term.”
– Ready Capital Chairman and Chief Executive Officer Thomas Capasse
“We are thrilled to join the Ready Capital team to usher in a new chapter of growth for both organizations by forming the 4th largest commercial mortgage REIT. Our synergies are undeniable given the complementary skillsets, product offerings, and geographic footprint. The Broadmark team is looking forward to working closely with our colleagues at Ready Capital to maximize the potential of our combined platform and deliver value for our shareholders.”
– Broadmark Chairman and Interim Chief Executive Officer Jeffrey Pyatt