Redfin completes $ 137.8 million Bay Equity mortgage

On April 1 Redfin (www.redfin.com) completed the acquisition of Bay Equity Home Loans (www.bayequityhomeloans.com) for $ 137.8 million in cash. Redfin’s national brokerage association with Bay Equity’s full-service mortgage lending accelerates Redfin’s strategy of becoming a single store for consumers to buy, sell, rent and finance a home.

“As home buyers struggle with affordable prices and bidding wars, it’s more important than ever for lenders and brokers to work together to deliver on every customer,” said Redfin CEO Glenn Kelman. “In dozens of markets, Bay Equity and Redfin have already met, and the difference in our dealers’ enthusiasm for putting Redfin mortgages on their customers is night and day: because Bay Equity has hundreds, not dozens, of loan staff. Bay Equity supports any type of loan because Bay Equity was already one of Redfin’s top lenders. But the biggest reason we expect to hit the ground running is how much the two teams have already enjoyed their collaboration. Redflies come out of every meeting saying “that was awesome”. “There are many ups and downs ahead, but since the signing of the agreement in January, we have felt better about it and how much value it can offer to both our customers and our shareholders.”

Integration Plan

As of today, Redfin agents in 91 markets can use Redfin software to refer their clients to a local Bay Equity loan officer. Brokers and loan agents work together based on where they work and how many customers they serve to offer great service and value to Redfin customers from day one. Home buyers can learn about the benefits of working with Redfin and Bay Equity or apply by visiting redfin.com/mortgage.

Bay Equity CEO Brett McGovern said: “Our first priority is to connect our approximately 2,400 Redfin executives with our 400 loan officers to help Redfin customers win in this competitive real estate market. Being part of Redfin will help us meet customers more efficiently, which means we can offer Redfin’s homebuyers competitive prices while providing a seamless experience from pre-approval to closing. We do not expect Redfin representatives to recommend us to customers because we belong to the same company, but because of the value and services we offer. “Alignment with Redfin recognizes our 14 years of growth strategy nationally and puts us on track to become the top 10 lenders.”

Bay Equity will continue to operate under its own name and current leadership, with refinancing and purchase loans from clients working with Redfin representatives as well as clients working with other brokerage firms. Upon completion of the transaction, Redfin terminates its operations at Redfin Mortgage and integrates all Bay Equity lending operations. In the coming weeks, 52 Redfin Mortgage employees will move to the Bay Equity team. Bay Equity will be headquartered in Corte Madera, California.

Transaction Data and Financial Guidance

Under the terms of the merger agreement, the purchase price is estimated at $ 137.8 million, representing a premium of $ 72.5 million relative to the material book value of Bay Equity as of February 28, 2022. The final purchase price will be subject to material equity adjustment at Bay Equity at the closing date, as well as some other transaction-related adjustments. When the purchase was first announced in January, Redfin intended to pay αγοράς the purchase price in cash and ⅓ in Redfin stock. Under the terms of the merger agreement, Redfin has the option to pay a higher percentage of the purchase price, including up to 100%, in cash under certain conditions. Redfin exercised this right and chose to pay 100% of the purchase price in cash.

Redfin expects the transaction to boost earnings per share in 2022. The company will provide initial guidance on Bay Equity in its next earnings call.

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