The combination offers immediate benefits to Redfin customers and agents and Bay Equity loan executives
SEATTLE, 04 April 2022– (BUSINESS WIRE) – (NASDAQ: RDFN) – 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 agents’ enthusiasm for putting Redfin mortgages on their clients 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 working together. Redfin people have come out of every meeting saying “this 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.”
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 so that we can help Redfin customers win in this competitive market. Being part of Redfin will help us meet customers more efficiently, which means we can offer Redfin’s homebuyers competitive prices while offering a seamless experience from pre-approval to closing. Redfin to recommend us to customers because we are part of the same company, but because of value and value and 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.
Statements for the future
This press release contains future statements within the meaning of federal securities legislation, including those related to the expected acquisition benefits for us, including that we expect the acquisition to increase our earnings per share in 2022 and the abolition of Redfin loans. We believe that our expectations regarding these future statements are reasonable, but the actual results may turn out to be substantially different. Factors that could make the actual results significantly different from his future statements in his press release include: (i) synergies from the acquisition of Bay Equity may not be as expected, not fully realized or may take longer (ii) closing Redfin Mortgage is more complicated or takes longer than expected. and (ii) the acquisition of our business resulting from the acquisition of Bay Equity is greater than expected. For additional factors, see the risks and uncertainties identified in the “Risk Factors” section of our Annual Report for the year ended December 31, 2021, which is available on the Investor Relations website at http://investors.redfin.com and on the SEC website at www.sec.gov. All future statements reflect our beliefs and assumptions as of the date of this press release only. We undertake no obligation to update future statements to reflect future events or circumstances.
Redfin (www.redfin.com) is a real estate company with technology technology. We help people find a place to live with brokerage services, iBuying, rental, lending, securities insurance and renovations. We sell houses for more money and charge half the price. We also manage the # 1 real estate brokerage site in the country. Our homebuyers see homes with custom tours first, and lending and securities services help them close quickly. Customers selling a home can receive a direct cash offer from Redfin or ask the renovation workshop to build their home to sell it for the top dollar. The rental business enables millions across the country to find apartments and homes for rent. Since its release in 2006, we have saved customers over $ 1 billion in commissions. We serve more than 100 markets in the US and Canada and employ over 6,000 people.
Redfin can publish information and analysis about the US housing industry on its corporate blog at www.redfin.com/news/housing-market-news/. We encourage investors and others interested in our company to check and subscribe to the information we publish on our corporate blog, as some of the information may be relevant.
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Mariam Sughayer, 206-876-1322
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Meg Nunnally, 206-576-8610