Rocket Companies to acquire Redfin
Rocket Companies, the platform consisting of mortgage, real estate and personal finance businesses, has entered into an agreement to acquire digital real estate brokerage Redfin in an all-stock transaction for a value of $12.50 per Redfin share, or $1.75 billion of equity value.
Founded in 2004, Redfin operates a top-three home search platform with more than 1 million for-sale and rental listings and a tech-powered brokerage of more than 2,200 agents. Rocket Companies will benefit from Redfin’s nearly 50 million monthly visitors and transaction will generate “significant revenue synergies” across search, real estate brokerage, mortgage origination, title and servicing.
Redfin reported significant losses in the past few years. The company’s brokerage model is different – instead of agents working as independent contractors, Redfin employs agents and provides them with health insurance and other benefits as well as the opportunity to earn equity compensation. The company claims that in 2024, Redfin agents earned a median income that was more than two times as much as agents at competing brokerages.
Rocket expects the combined company to achieve more than $200 million in run-rate synergies by 2027, including approximately $140 million in cost synergies from rationalization of duplicative operations and other costs. In addition, Rocket expects more than $60 million in revenue synergies from pairing the company’s financing clients with Redfin real estate agents, and from driving clients working with Redfin agents to Rocket’s mortgage, title and servicing offerings. The transaction is expected to be accretive to Rocket Companies’ adjusted earnings per share by the end of 2026.
“Rocket and Redfin have a unified vision of a better way to buy and sell homes. Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers.” – Varun Krishna, CEO of Rocket Companies.
“Rocket and Redfin’s approaches to lending and brokerage service have always been two halves of one vision to make the whole home-buying process magical. We want a customer to be able to check her phone to find out what she can afford, see which homes are just right for her, schedule a tour with a local, expert Redfin agent, and get pre-qualified for a loan, all in a matter of minutes. Varun and I see how much better real estate could be when AI guides customers not just through that first step in their search, but all the way home, through the sale, the loan and then a lifetime of accumulating equity and wealth.” – Glenn Kelman, CEO of Redfin.
