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Why Shares of Mr. Cooper Group Are Blasting Higher Today
COOPMr. Cooper Group(COOP) The Motley Fool·2025-03-31 15:18

Core Viewpoint - Mr. Cooper Group is set to be acquired by Rocket Companies in an all-stock deal valued at 9.4billion,representingasignificantconsolidationinthemortgageindustry[2][4].Group1:AcquisitionDetails−TheacquisitionvaluesMr.CooperGroupat9.4 billion, representing a significant consolidation in the mortgage industry [2][4]. Group 1: Acquisition Details - The acquisition values Mr. Cooper Group at 143.33 per share, which is a 35% premium over its 30-day average weighted share price [2]. - Shareholders of Mr. Cooper Group will receive a 2cashdividendpersharebeforethedealcloses,expectedinthefourthquarterofthisyear[2].−Post−acquisition,Mr.CooperGroup′schairmanandCEO,JayBray,willtakeonthesamerolesatRocketMortgage,withtwoadditionalmembersfromMr.CooperGroupjoiningRocket′sboard[3].Group2:FinancialImplications−Thedealisprojectedtobeimmediatelyaccretivetoearnings,withexpectedgrowthin2026earningsinthemid−teenspercentage−wise[3].−Rocketanticipatesincurring2 cash dividend per share before the deal closes, expected in the fourth quarter of this year [2]. - Post-acquisition, Mr. Cooper Group's chairman and CEO, Jay Bray, will take on the same roles at Rocket Mortgage, with two additional members from Mr. Cooper Group joining Rocket's board [3]. Group 2: Financial Implications - The deal is projected to be immediately accretive to earnings, with expected growth in 2026 earnings in the mid-teens percentage-wise [3]. - Rocket anticipates incurring 500 million in acquisition-related expenses while achieving annual pretax cost savings between 400millionand400 million and 500 million [3]. Group 3: Market Context - Rocket Companies is actively consolidating the fragmented mortgage industry, having recently acquired Redfin for $1.75 billion [4]. - Following the acquisition of Mr. Cooper Group, Rocket will control one out of every six mortgages in the U.S. [4]. Group 4: Company Performance - Despite high interest rates negatively impacting the mortgage sector, Mr. Cooper Group's stock has surged 2,146% over the past five years, making it a strong performer in the market [5]. - As the largest mortgage servicer in the U.S., Mr. Cooper Group benefits from fewer refinances due to high rates, which enhances the value of mortgage servicing rights [5].