Detroit-based Rocket Companies announced a definitive agreement to acquire Mr. Cooper Group in an all-stock transaction for $9.4 billion in equity value, based on an 11x exchange ratio.
With this deal, Rocket will bring its industry-leading mortgage recapture capabilities to a combined servicing book of $2.1 trillion across nearly 10 million clients, representing 1 in every 6 mortgages in America. This combination drives higher loan volume and long-term client relationships, while providing greater recurring revenue and lowering client acquisition costs.
Rocket will combine the homeownership experience at scale with the acquisitions of Mr. Cooper and Redfin. And this enables Rocket to accelerate its AI-powered platform and remove the friction and complexities plaguing today’s homebuying process.
Following the acquisition of Mr. Cooper, Rocket will gain understanding of nearly 7 million additional clients and 150 million annual customer interactions. And the combined company will attain a balanced business model and maintain stability in all market environments. Rocket will drive earnings growth from high-margin recapture opportunities on the combined servicing portfolio, which together generated $4 billion of servicing fee revenue in 2024.
The deal is expected to generate $100 million in additional pre-tax revenue from higher recapture rates and attaching Rocket’s title, closing and appraisal services to Mr. Cooper’s existing originations. And Rocket projects $400 million in pre-tax cost savings from streamlining operations, corporate expense and technology investments.
The deal is expected to be accretive to Rocket’s adjusted earnings per share immediately after closing.
The combined company will be led by an experienced board and leadership team that utilizes the strengths and capabilities of both companies. Upon closing of the deal, it is expected that Mr. Cooper Group’s Chairman and CEO Jay Bray will become President and CEO of Rocket Mortgage, reporting to Krishna. Dan Gilbert will remain Chairman of Rocket Companies.
Upon closing of the deal, the Board of the combined company will consist of 11 members, 9 of whom will be from the board of Rocket and 2 of whom will be from the board of Mr. Cooper.
Under the terms of the agreement, Mr. Cooper shareholders will receive a fixed exchange ratio of 11.0 Rocket shares for each share of Mr. Cooper common stock. And this represents a $143.33 per share value based on the closing price as of March 28, 2025, and a premium of 35% over the volume weighted average price (VWAP) of Mr. Cooper’s common stock for the 30 days ending March 28, 2025.
Upon completion of the deal, Rocket shareholders will own approximately 75% of the combined company on a fully diluted basis pro forma for the Redfin transaction, while Mr. Cooper shareholders will own approximately 25%. The all-stock transaction is intended to be tax-free to Mr. Cooper shareholders.
In connection with the completion of the deal, Mr. Cooper will declare and pay a dividend of $2.00 per share of Mr. Cooper common stock.
The deal has been unanimously approved by the Boards of Directors of both Rocket and Mr. Cooper. And it is expected to close in the fourth quarter of 2025, subject to approval of Mr. Cooper shareholders and the satisfaction of other closing conditions, including customary regulatory approvals.
J.P. Morgan Securities is acting as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison is acting as legal counsel to Rocket. Citigroup Global Markets is acting as financial advisor and Wachtell, Lipton, Rosen & Katz and Bradley Arant Boult Cummings is acting as legal counsel to Mr. Cooper.
KEY QUOTES:
“Servicing is a critical pillar of homeownership – alongside home search and mortgage origination. With the right data and AI infrastructure we will deliver the right products at the right time. That’s how we build lifelong relationships, by proactively unlocking benefits and meeting needs before they arise. We look forward to welcoming Mr. Cooper’s nearly 7 million clients.”
- Varun Krishna, Rocket CEO
“Mr. Cooper has been on a journey to transform the homeownership experience, and we have built the most advanced servicing platform in the mortgage industry. By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care. I am deeply grateful for the dedication of the Mr. Cooper team and look forward to our continued work as we lead our industry into the future of homeownership.”
- Jay Bray, Mr. Cooper Group Chairman and CEO
