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Real estate financial specialist Ready Capital Corp. will acquire Broadmark Realty Capital, another real estate financial company, in an all-stock deal. Upon completion of the merger, Ready Capital will be an entity with a $2.8B capital base.
New York-based Ready Capital said the merged company will be the fourth-largest mortgage REIT by capital base. The combined company will retain the name Ready Capital and its New York HQ.
Under the terms of the merger, which is expected to close in the second quarter of this year, each share of Broadmark stock will be converted into about 0.47 shares of Ready Capital common stock.
Broadmark stock ticked up about 13% on Monday morning. Over the last year, its stock has lost about 45% of its value.
The closing stock prices for Ready Capital and Broadmark on Friday imply an offer price of $5.90 per Broadmark share, according to the companies, representing a 41% premium compared with its price at the end of 2022.
Ready Capital stockholders will own about 64% of the combined company’s stock once the deal is closed, while Broadmark stockholders will own about 36% of the new entity's stock.
In its current form, Broadmark Realty Capital was created in 2019, when Trinity Merger Corp., based in Honolulu, acquired Seattle-based Broadmark for $1.5B. Broadmark was originally founded in 2010 to provide financing for real estate investors and developers by originating short-term, first deed of trust mortgages.
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