Rocket Companies has announced that it has entered into an agreement to purchase digital real estate brokerage Redfin in an all-stock transaction for a value $1.75 billion of equity value.
Founded in 2004, Redfin operates a home search platform with more than one million for-sale and rental listings and a tech-powered brokerage of more than 2,200 agents.
The transaction has been approved by the Boards of Directors of both Rocket Companies and Redfin, and is expected to close in the second or third quarter of 2025, subject to approval by Redfin shareholders and the satisfaction of other closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Upon closing of the transaction, it is expected that Redfin CEO Glenn Kelman will continue to lead the Redfin business, reporting to Rocket Companies’ CEO Varun Krishna.
“Rocket and Redfin have a unified vision of a better way to buy and sell homes,” said Krishna. “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.”
Rocket’s digital platform has grown to provide home financing in all 50 states across more than 3,000 counties and parishes.
“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,” said Kelman. “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.”
News of the acquisition sent Redfin shares upward 75% in premarket trading Monday morning after Rocket announced the deal, while shares of Rocket were reported down 11%.
According to Yahoo! Finance, Rocket Companies shares had added nearly a quarter of their value over the past 12 months, while Redfin stock had lost about 18% of its value in that span.
Keys to the Acquisition
Bringing Rocket and Redfin together is expected to:
- Introduce more consumers to the Rocket ecosystem: Rocket Companies will benefit from Redfin’s nearly 50 million monthly visitors, 1 million active purchase and rental listings and staff of 2,200+ real estate agents across 42 states – with Redfin agents ranking in the top 1% of agents working at any nationwide brokerage.
- Drive purchase mortgage growth: The transaction will generate significant revenue synergies across search, real estate brokerage, mortgage origination, title and servicing. Rocket will match homebuyers with the best real estate agents and the best loan officers across the combined companies. In 2024, Rocket saw an 8% year-over-year increase in purchase market share and aims to further accelerate growth through this acquisition.
- AI, technology and personalization at scale: With more than 14 petabytes of combined data, Rocket gains unparalleled consumer insights, including information about homebuyers, sellers, and agents across a data repository of 100 million properties. This data will strengthen Rocket’s AI models enabling easier and more personalized and automated consumer experiences.
- Achieve significant earnings accretion: 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 Companies will maintain its strong balance sheet and conservative leverage profile upon close of the transaction.
