Rocket Companies agrees $9.4bn Mr. Cooper Group deal

June 2025 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

June 2025 Issue

In late March, Rocket Companies Inc, the largest mortgage lender in the US, agreed to acquire Mr. Cooper Group, the US’s leading mortgage servicer, in an all-stock deal valued at $9.4bn.

Under the terms of the agreement, Mr. Cooper shareholders will receive a fixed exchange ratio of 11 Rocket shares for each share of Mr. Cooper common stock held. This represents a $143.33 per share value based on the closing price as of 28 March 2025, and a premium of 35 percent over the volume weighted average price of Mr. Cooper’s common stock for the 30 days ending 28 March 2025. Upon completion of the transaction, Rocket shareholders will own approximately 75 percent of the combined company on a fully diluted basis pro forma, while Mr. Cooper shareholders will own approximately 25 percent. The all-stock transaction is intended to be tax-free to Mr. Cooper shareholders.

The combined entity will manage more than $2.1 trillion in unpaid principal balances across nearly 10 million customers, equal to one in six US mortgages. Rocket will gain nearly 7 million additional clients and 150 million annual customer interactions as a result of the acquisition. The transaction has been unanimously approved by the boards of directors of both Rocket and Mr. Cooper, and 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.

Upon closing of the transaction, it is expected that Jay Bray, chairman and chief executive of Mr. Cooper Group, will become president and chief executive of Rocket Mortgage. Dan Gilbert will remain chairman of Rocket Companies. The board of the combined company will consist of 11 members, nine from the board of Rocket and two from the board of Mr. Cooper.

The merger is expected to generate $500m in annual pre-tax synergies through operational efficiencies and technology investments while being immediately accretive to Rocket’s earnings per share. Specifically, the transaction is expected to generate $100m in additional pre-tax revenue from higher recapture rates and attaching Rocket’s title, closing and appraisal services to Mr. Cooper’s existing originations. In 2024, the two companies’ servicing businesses collectively generated $4bn in revenue.

“Servicing is a critical pillar of homeownership – alongside home search and mortgage origination,” said Varun Krishna, chief executive of Rocket. “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.”

“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,” said Mr Bray. “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.”

Earlier in March, Rocket announced it had agreed to acquire popular real estate brokerage and home data website Redfin for $1.75bn. That deal is intended to boost Rocket’s mortgage origination business. According to the statement announcing the deal, Rocket will bring together the homeownership experience at scale with the acquisitions of Mr. Cooper and Redfin. This allows Rocket to accelerate its AI-powered platform and remove the friction and complexities plaguing today’s homebuying process.

Richard Summerfield