Rocket Companies has completed its acquisition of Mr. Cooper Group, a mortgage servicer, in an all-stock deal now valued at $14.2 billion. The value of the transaction increased significantly from its original estimate of $9.4 billion after Rocket’s share price rose by nearly 50 percent since the deal was announced in March, outpacing gains seen in the broader S&P 500.
This acquisition is one of Rocket’s largest to date and follows its recent purchase of home-search platform Redfin for $1.75 billion, which closed in July. With these moves, Rocket aims to create a vertically integrated business that covers home buying, selling, and financing.
“By combining mortgage servicing and loan origination, along with home search through Redfin, we are paving the path for Americans to own the dream,” said CEO Varun Krishna.
The merger brings together two major players in the U.S. mortgage industry: Rocket is among the country’s leading originators, while Mr. Cooper is recognized as the top mortgage servicer nationally. The combined company will manage more than $2.1 trillion in home loans—about one out of every six mortgages nationwide—and Mr. Cooper’s brand will be absorbed into Rocket.
Following the merger, shareholders from Rocket will control 75 percent of the combined company; those from Mr. Cooper will hold the remaining stake. Jay Bray, CEO of Mr. Cooper, will take on the role of president at Rocket Mortgage and report directly to Krishna.
Despite this expansion strategy modeled after other large tech and financial firms seeking end-to-end control over consumer transactions, Rocket has also made workforce reductions due to cost pressures within the industry—cutting around 2 percent of staff following its Redfin acquisition because of overlapping roles across divisions.
