Ready Capital Corporation Announces Completion of Merger
Rhea-AI Summary
Ready Capital (NYSE: RC) has completed its previously announced acquisition of United Development Funding IV (UDF IV). Under the merger terms, each UDF IV share was converted into 0.416 shares of Ready Capital common stock and 0.416 contingent value rights (CVRs).
The CVRs represent potential additional Ready Capital shares based on cash proceeds from five UDF IV loans over four periods: October 1, 2024 to December 31, 2025, and three subsequent calendar years. The combined entity continues to operate as Ready Capital and maintains its NYSE listing under 'RC'.
Ready Capital is a multi-strategy real estate finance company focusing on lower-to-middle-market commercial real estate loans, including agency multifamily, investor, construction, bridge, and SBA Section 7(a) loans. The company employs approximately 350 professionals nationwide.
Positive
- Portfolio expansion through acquisition of UDF IV loan assets
- Potential additional value creation through CVR structure
- Maintains NYSE listing and market presence
Negative
- Integration risks and potential management disruption
- Performance dependent on specified UDF IV loans
- Exposure to litigation risks related to UDF IV
News Market Reaction
On the day this news was published, RC declined 0.99%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
NEW YORK, March 13, 2025 (GLOBE NEWSWIRE) -- Ready Capital Corporation (NYSE: RC) (“Ready Capital” or the “Company”) today announced that it has completed the previously announced acquisition of United Development Funding IV (“UDF IV”) (the “Merger”) pursuant to the terms of the Agreement and Plan of Merger, dated as of November 29, 2024, by and among Ready Capital, RC Merger Sub IV, LLC, and UDF IV. The combined company will conduct business under the name “Ready Capital Corporation” and will continue to trade on the New York Stock Exchange under the ticker symbol “RC.”
At the effective time of the Merger, each outstanding common share of beneficial interest, par value
“We look forward to scaling our portfolio, expanding our core business, and unlocking exciting growth and value creation opportunities,” stated Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer.
Forward-Looking Statements
This press release contains statements that constitute “forward-looking statements,” as such term is defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” or other similar words, are based on current expectations and beliefs of Ready Capital and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Ready Capital cannot provide any assurance that its expectations will be attained.
Factors that could cause actual results to differ materially from expectations include, but are not limited to, risks that will affect the amount of payments under the CVRs, if any, including, among others, the performance of the specified UDF IV loans and developments in litigation involving or relating to UDF IV; risks related to disruption of management attention from the ongoing business operations due to the Merger; the ability to retain key personnel; availability of suitable investment opportunities; changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; general economic conditions; market conditions; inflationary pressures on the capital markets and the general economy; conditions in the market for small balance commercial loans and other investments; legislative and regulatory changes that could adversely affect the business of Ready Capital; risks related to integrating an existing lending platform into Ready Capital’s operations; and other factors, including those set forth in the Risk Factors section of Ready Capital’s most recent Annual Report on Form 10-K and other reports filed by Ready Capital with the SEC, copies of which are available on the SEC's website, www.sec.gov. Ready Capital undertakes no obligation to update these statements for revisions or changes after the date of this press release, except as required by law.
About Ready Capital Corporation
Ready Capital Corporation (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services lower-to-middle-market investor and owner occupied commercial real estate loans. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program. Headquartered in New York, New York, the Company employs approximately 350 professionals nationwide.
Advisors
Piper Sandler & Co. acted as exclusive financial advisor and Alston & Bird LLP acted as legal advisor to Ready Capital. Moelis & Company LLC acted as exclusive financial advisor to UDF IV, Gibson, Dunn & Crutcher LLP acted as legal advisor to UDF IV and Holland & Knight LLP acted as legal advisor to the special committee of the UDF IV Board of Trustees.
Contact
Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com
Ready Capital Media Relations
PR@readycapital.com
FAQ
What are the key terms of Ready Capital's (RC) merger with UDF IV?
When will the CVRs from Ready Capital's merger start generating potential returns?
How will Ready Capital's merger with UDF IV impact its business operations?
What is Ready Capital's (RC) current business focus post-merger?
