Ready Capital and Broadmark Realty Capital have announced a definitive merger deal that will create the fourth-largest commercial mortgage REIT with a capital base of $2.8 billion. Both Ready Capital (NYSE:RC) and Broadmark Realty Capital (NYSE:BRMK) are real estate finance companies that provide loans to businesses and investors. Ready Capital focuses on small and middle-market businesses, while Broadmark Realty Capital provides financing to commercial real estate developers and investors.
The merger will see Broadmark merge with Ready Capital, with each BRMK share converted into 0.47233 shares of Ready Capital common stock. The offer price for Broadmark shares is $5.90 per share, representing a 41% premium or approximately 0.85x tangible book value as of December 31, 2022.
Upon completion of the merger, Ready Capital will have a pro forma equity capital base of $2.8 billion. RC stockholders are expected to own approximately 64% of the combined company’s stock, while BRMK stockholders will own around 36%.
The combined company will operate under the name “Ready Capital Corporation,” with its shares trading on the NYSE under the existing ticker symbol “RC.” The entity will have a market capitalization of $2.2 billion and will be headquartered in New York.
The transaction has been unanimously approved by each of the companies’ board and is expected to close during the second quarter of 2023. The merger will create a strong player in the commercial mortgage REIT market, with a diversified portfolio and a well-capitalized balance sheet. The combined company will have the scale, expertise, and resources to pursue growth opportunities and drive long-term shareholder value.
Overall, the merger of Ready Capital and Broadmark Realty Capital is a positive development for both companies and the commercial mortgage REIT market. The combined company will be well-positioned to capitalize on growth opportunities and deliver value to shareholders.