Rocket Companies announced Monday morning it is buying loan service provider Mr. Cooper Group in an all-stock transaction valued at $9.4 billion. The deal will create one of the largest mortgage companies in the U.S., responsible for an estimated 1 in 6 mortgages.

The combined entity will have a loan servicing portfolio of more than $2.1 trillion and nearly 10 million clients. Company officials expect the company will drive higher loan volume, greater recurring revenue and lower client acquisition costs.

“By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care,” Mr. Cooper CEO Jay Bray said.  

This is the second major deal for the real estate behemoth in less than a month, after acquiring the real estate brokerage Redfin in a transaction worth $1.75 billion on March 10. In a press release, Rocket maintained that the acquisitions of Mr. Cooper and Redfin will help to accelerate its artificial intelligence-powered platform and remove the friction and complexities plaguing today’s homebuying process.  

Mr. Cooper shareholders would receive 11 shares of Rocket for each share of Mr. Cooper they currently own. The deal values Mr. Cooper stock at $143.33 per share, a premium of about 35% compared to its value during the past 30 days.  

The deal is expected to enhance earnings growth with high-margin recapture opportunities on the combined servicing portfolio, which when taken together, generated $4 billion of servicing fee revenue in 2024. Rocket also estimates $400 million in savings from streamlining operations, reducing corporate expenses and combined technology investments.