Shares of Ready Capital (NYSE: RC) tanked in pre-market trading on Monday as the real estate finance company announced the acquisition of Broadmark Realty Capital (BRMK), a specialty real estate finance company in an all-stock deal.
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As a part of this agreement, every share of Broadmark will be converted into 0.47233 shares of Ready Capital common stock, or a total of around 63 million shares of Ready Capital. Ready Capital will acquire these shares at an offer price of $5.90, indicating a 41% premium or around 0.85x tangible book value as of December 31, 2022.
After the closing of this acquisition, Ready Capital stockholders will own around 64% of the combined company’s stock, while Broadmark is expected to own the remaining 36%. In addition, Ready Capital will also assume Broadmark’s outstanding senior unsecured notes.
The acquisition is expected to close in the second quarter of this year.
RC stock has gained by more than 10% in the year to date.
