Ready Capital Corporation Completes UDF IV Acquisition Successfully

Ready Capital Corporation Completes Merger with UDF IV

Ready Capital Corporation (NYSE: RC) has reached a significant milestone by finalizing its acquisition of United Development Funding IV (UDF IV). The merger was carried out in accordance with the Agreement and Plan of Merger, highlighting Ready Capital's commitment to growth and enhanced operational capacity in the real estate finance sector.

The Merger Agreement

The terms of the merger were set forth in an agreement dated in late 2024, allowing Ready Capital to integrate UDF IV into its operations. This strategic move aims to not only expand the company’s portfolio but also to create new opportunities for value generation. The combined entity will continue to operate under the Ready Capital Corporation name while retaining its position on the New York Stock Exchange using the ticker symbol 'RC.'

Details of the Share Conversion

Following the successful merger, each existing share of UDF IV was effectively retired. Shareholders of UDF IV are entitled to receive shares of Ready Capital's stock as part of this process. For every common share they held, shareholders will receive 0.416 shares of Ready Capital's common stock alongside contingent value rights (CVRs) that could yield further stock based on specific performance criteria.

Company Statements on the Merger

Thomas Capasse, Chairman and CEO of Ready Capital, expressed enthusiasm regarding the merger, emphasizing the potential for portfolio scaling, business expansion, and the realization of growth prospects. This merger is viewed as a pivotal step for the company towards achieving its long-term strategic objectives.

Operational Insights and Business Focus

Ready Capital Corporation operates as a multifaceted real estate finance entity specializing in a variety of financial products tailored for lower-to-middle-market investors and owner-occupied commercial real estate loans. Its operations span across agency multifamily, construction financing, and bridge loans, complemented by U.S. Small Business Administration (SBA) loans, aimed at catering to diverse client needs.

Backing and Advisors Involved

In navigating this acquisition, Ready Capital enlisted the advisory expertise of Piper Sandler & Co. and Alston & Bird LLP, ensuring comprehensive support in financial and legal matters. These advisory firms played essential roles in steering the merger toward successful completion.

Looking Ahead

Moving forward, Ready Capital is poised to leverage this merger for enhancing its market presence and proficiency in offering a broader range of financial solutions. The commitment to integrated operations and customer-centric services underlines the ongoing dedication to excellence in the real estate finance market.

Frequently Asked Questions

What was the reason for Ready Capital's merger with UDF IV?

The merger aimed to expand Ready Capital’s portfolio and enhance its operations in real estate finance, allowing for greater growth and opportunities.

What are CVRs, and how do they relate to the merger?

Contingent value rights (CVRs) provide UDF IV shareholders potential rights to additional shares based on the performance of specific UDF IV loans post-merger.

Who were the advisors for this merger?

Piper Sandler & Co. served as the exclusive financial advisor, while Alston & Bird LLP provided legal advice to Ready Capital during the merger process.

How does this merger affect the stock symbol for Ready Capital?

Post-merger, Ready Capital continues to trade under the ticker symbol 'RC' on the New York Stock Exchange.

What services does Ready Capital Corporation offer?

Ready Capital specializes in originating, acquiring, financing, and servicing commercial real estate loans for lower-to-middle-market investors.

About The Author

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