Less than three weeks after announcing its intention to acquire digital brokerage platform Redfin in an all-stock transaction, Rocket Companies says it now plans to acquire national mortgage servicer Mr. Cooper Group Inc., also in an all-stock transaction.
The deal, if approved, is valued at about $9.4 billion, Rocket says in a release. The combined company will service more than $2.1 trillion in mortgages.
Integrating Rocket’s originations-servicing recapture flywheel with Mr. Cooper’s servicing platform will drive down costs and improve the experience for the companies’ nearly 10 million combined clients, representing one in every six mortgages, Rocket says.
The transaction is expected to generate annual run-rate revenue and cost synergies of approximately $500 million, contributing to organic revenue growth while increasing operating leverage and maintaining significant capital and liquidity.
With this acquisition, Rocket will bring its industry-leading mortgage recapture capabilities to a combined servicing book of $2.1 trillion across nearly 10 million clients, representing one in every six mortgages in America. Ultimately, this combination drives higher loan volume and long-term client relationships – while providing greater recurring revenue and lowering client acquisition costs.
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.
“Servicing is a critical pillar of homeownership – alongside home search and mortgage origination,” says Varun Krishna, CEO for Rocket Companies, in the release. “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,” says Jay Bray, chairman and CEO of Mr. Cooper Group. “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.”
The deals will enable Rocket to significantly increase its data set, thus enabling it to improve automation, personalization and efficiency. Following the acquisition of Mr. Cooper, Rocket will gain understanding of nearly 7 million additional clients and 150 million annual customer interactions.
Rocket also gains enhanced earnings growth opportunity across all interest rate market environments. 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.
Rocket will also be able to realize substantial revenue and cost synergies. The transaction 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.
Rocket projects $400 million in pre-tax cost savings from streamlining operations, corporate expense and technology investments.
