Rocket Companies has filed an amended S-1 form with the U.S. Securities and Exchange Commission for its initial public offering. The company intends to price its 150 million shares in the range of $20 to $22, with an overallotment option for an additional 22.5 million shares. At the maximum price, the entire offering is valued up to $3.795 billion. The company intends to list its shares on the New York Stock Exchange under the symbol RKT.
The underwriters for the offering are Goldman Sachs, Morgan Stanley, Credit Suisse, JPMorgan, RBC, Allen, BofA Securities, Barclays, Citigroup, UBS, CastleOak Securities, Drexel Hamilton, Fifth Third, Huntington Capital Markets, Loop Capital Markets, Mischler Financial Group, Nomura, Ramirez, Siebert Williams Shank and Zelman Partners.
The flagship business, Rocket Mortgage, has provided more than $1 trillion in home loans since its inception while growing its market share from 1.3% in 2009 to 9.2% in the first quarter of 2020, a CAGR of 19%. It also has expanded into complementary industries, such as real estate services, personal lending and auto sales. The company also operates Quicken Loans.
Rocket Homes, the firm’s proprietary home search platform and real estate agent referral network, helps match Rocket Mortgage clients with highly rated agents, and the coordinated home buying experience improves the certainty of closing.
In 2019, Rocket Homes participated in more than 30,000 real estate transactions. Rocket Loans, the prime personal loan business, underwrote approximately 25,000 closed loans in the same time (a year-over-year increase of over 30%). Rocket Auto, the auto sales business that was previously part of Rock Connections, facilitated nearly 20,000 used car sales in 2019, its second full year of operation.
In terms of the financials, the total revenue for the 2019 full year was $5.1 billion and net income attributable to Rocket Companies was $893.8 million, representing a 22% and 46% growth from the prior year, respectively. Over the same time period, adjusted revenue was $5.9 billion, adjusted net income was $1.3 billion, and adjusted EBITDA was $1.9 billion.
The company intends to use the entire aggregate amount of the net proceeds to acquire a number of holding units and Class D common stock from RHI. Note that the company said that it does not intend to acquire any of these securities from Dan Gilbert, its founder and board chair.
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