Rocket Companies (NYSE RKT) announced that it has acquired Mr. Cooper for $9.4 billion in an all-stock deal.
Rocket’s aggressive expansion strategy is evident in the acquisition of Redfin, a real estate listing service, just a few weeks prior.
Following the announcement, shares of Mr. Cooper soared by more than 27%.
Stocks were up more than 16% at the opening of the market.
Rocket Companies, however, was down more than 7%.
According to the agreement, shareholders of Mr. Cooper will receive 11 Rocket shares per share of Mr. Cooper common stocks.
This value Mr. Cooper at $143.33 on the basis of Rocket’s closing prices as of March 28,2025. This represents a 35% increase over Mr. Cooper’s 30-day volume weighted average price.
Rocket shareholders will own approximately 75 percent of the combined company once the merger is finalized. Mr. Cooper shareholders will retain the remaining 25 percent.
A combined servicing portfolio of $2.1 trillion
Rocket’s mortgage servicing business will be significantly expanded by the acquisition.
The combined company will manage a servicing book worth $2.1 trillion, which is spread across 10 million clients. This represents one out of every six mortgages in America
Rocket wants to use its mortgage recapture capability to improve long-term relationships with customers and increase loan volumes.
Varun Krishna, Rocket CEO, said that “service is a critical component of homeownership. It’s right up there with home search and mortgage origination.”
“With the correct data and AI infrastructure, we will deliver the best products at the right moment. We build long-lasting relationships by proactively unlocking the benefits and meeting customer needs before they even arise. We look forward to welcoming the nearly 7 million clients of Mr. Cooper.”
Jay Bray, Chairman and CEO of Mr. Cooper, echoed the sentiments expressed by Mr. Cooper Chairman and reiterated the complementary strengths between the two companies.
Bray said, “By merging Mr. Cooper with Rocket, we’ll form the strongest mortgage company within the industry.”
“We are creating a seamless homeownership experience, backed by the latest technology and customer service.”
Revenue growth and cost synergies
The deal is expected generate significant financial benefits.
Rocket expects to generate an additional $100,000,000 in pre-tax revenue as a result of improved mortgage recapture rates, and the integration into Mr. Cooper’s operations of its title, closure, and appraisal services.
The company also expects to save $400 million before taxes by streamlining operations, cutting corporate expenses and optimizing its technology investments.
Rocket’s combined service portfolio will continue to generate earnings growth, regardless of interest rate fluctuations.
In 2024, the combined revenue of the two companies’ service businesses will be $4 billion.
Rocket has a strong history of client retention. It boasts an 83% mortgage capture rate, which is triple the industry average.
This figure is expected to be further boosted by the acquisition of Mr. Cooper, which will leverage data from more than 7 million additional customers and 150 millions annual customer interactions.
Outlook and regulatory approvals
The transaction is expected to close in early 2026, pending regulatory approvals and shareholder vote.
Mr. Cooper will pay a $2.00 dividend per share to its shareholders prior to the completion of the deal.
Rocket’s acquisition will allow it to consolidate its position as the dominant force in the U.S. Mortgage Industry, offering a data-driven and integrated homeownership experience.
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