Shares of Rocket Companies Inc (NYSE: RKT) are down about 8.0% on Monday after the mortgage lender announced its largest acquisition to date.
Rocket is buying Truebill for $1.275 billion
In a press release this morning, Rocket Companies said it will buy Truebill – a personal finance app for $1.275 billion in cash. The Michigan-based company expects the acquisition to be accretive to its annual recurring revenue by $100 million.
According to CEO Jay Farner, it’s the “connectivity” and the ease of data transfer, enabling smart financial decisions that makes Truebill a great fit for Rocket Companies. On CNBC’s “Squawk on the Street”, he said:
70% of their clients don’t have a home today, they’re budgeting and planning. Instead of going through the mortgage process, they can tie directly to Rocket Mortgage. Their data transfers right over, they know they’re approved and are ready to buy a home or a car, or to get a personal loan.
Deal is expected to close in the next few days
Truebill now has 2.5 million users after a 100% growth in the member count last year. Its deal with Rocket Companies is expected to close before the end of 2021. Commenting further on the rationale behind the $1.275 billion agreement, CEO Farner said:
It’s a way for us to grow our market share. We want to go north of 10% in the mortgage market in 2022. For us, it’s about the lifetime value. We want to keep growing regardless of whether interest rates are going up or down. This is just one more strategic play allowing us to do so.
In November, Rocket Companies reported its second consecutive record purchase quarter. The stock is down nearly 30% for the year.
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