Real Estate Finance Company Ready Capital Corp. RC,
and Broadmark Realty Capital Inc. BRMK,
said Monday they have agreed to merge in a deal that is expected to create a company with a pro forma capital base of $2.8 billion. Under the terms of the agreement, Broadmark shares will convert into 0.42733 Ready Capital common shares, or a total of approximately 63 million Ready Capital common shares. Based on the closing prices of the two shares on February 24, the deal implies an offering price of $5.90 per Broadmark share, equivalent to a premium of 41% or approximately 0.85 times the tangible book value as of February 31. December 2022. Once the deal closes, Ready Capital shareholders will own about 64% of the shares of the combined company. The new Ready Capital will have a market capitalization of around $2.2 billion and will be listed on the New York Stock Exchange, under the existing ticker symbol “RC.” The deal is expected to close in the second quarter and create the fourth largest commercial mortgage REIT. Ready Capital CEO Thomas Capasse will continue to lead the company. Broadmark shares were up 18% before trading.