Rocket Companies acquires Mr. Cooper, a Texas mortgage servicing firm, in $9.4 billion deal
Rocket Companies has announced its acquisition of the Texas-based mortgage servicing firm Mr. Cooper in a deal worth $9.4 billion. This move will significantly enhance Rocket’s mortgage servicing operations, granting them control over one out of every six mortgages in the United States. The merger is expected to deliver annual savings of $400 million for the combined entities while generating an additional $100 million in revenue. This acquisition follows closely on the heels of Rocket Companies’ previous announcement of its intention to acquire the real estate platform Redfin.
Dan Gilbert’s Rocket Companies seems to be in an active phase of acquiring businesses this season, with its latest target being the Mr. Cooper Group. Headquartered in suburban Dallas, Mr. Cooper Group is the largest servicer of residential mortgages in the nation. The proposed all-stock deal with an equity value of $9.4 billion is anticipated to be finalized by the end of the fourth quarter. Upon completion, Rocket will gain control over a substantial portion of the mortgage servicing market, with a servicing portfolio that encompasses one in every six mortgages in the U.S.
Mortgage servicers play a crucial role in the industry by collecting mortgage payments from borrowers and forwarding them to the mortgage investors and owners. In return, servicers typically receive a modest percentage of these monthly payments. The acquisition is projected to result in significant cost savings of $400 million annually for the merged companies. This includes operational efficiencies in both Mr. Cooper’s servicing division and Rocket’s mortgage origination arm. While details on potential layoffs at Rocket remain unclear at this time, the transaction is expected to introduce $100 million in fresh revenue streams by cross-selling Rocket’s services to Mr. Cooper’s client base.
Mr. Cooper, a company that employs 7,900 individuals across the United States and India, reported a net income of $669 million on revenues of $2.2 billion in 2024. With this acquisition, Rocket Companies aims to solidify its position in the mortgage servicing sector and capitalize on the synergies between the two entities. The strategic move towards acquiring Mr. Cooper reflects Rocket’s commitment to expanding its business portfolio and boosting its revenue streams.
In summary, Rocket Companies’ purchase of Mr. Cooper represents a strategic maneuver to enhance its mortgage servicing capabilities and broaden its market presence. With the potential for substantial cost savings and additional revenue generation, this acquisition aligns with Rocket’s growth strategy in the highly competitive mortgage industry. By leveraging the strengths of both Mr. Cooper and Rocket Companies, this deal aims to create a more robust and competitive player in the mortgage servicing arena.