Ready Capital Corporation (NYSE:RC) entered into a definitive merger agreement to acquire Broadmark Realty Capital Inc. (NYSE:BRMK) from The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK) and others for approximately $780 million on February 26, 2023. Under the terms of the merger agreement, each share of Broadmark common stock will be converted into 0.47233 shares of Ready Capital common stock, or a total of approximately 63 million shares of Ready Capital common stock. The respective closing stock prices for Ready Capital and Broadmark on February 24, 2023 imply an offer price of $5.90 per Broadmark share. Post-merger, the market capitalization of the combined company is approximately $2.2 billion. Upon the closing of the merger, Ready Capital stockholders are expected to own approximately 64% of the combined company?s stock, while Broadmark stockholders are expected to own approximately 36% of the combined company?s stock. In addition, Ready Capital will assume Broadmark?s outstanding senior unsecured notes. The combined company will operate under the name ?Ready Capital Corporation? and its shares will trade on the NYSE under the existing ticker symbol ?RC?. Waterfall Asset Management, LLC will continue to manage the combined company. Upon completion of the merger, Ready Capital?s Chairman, Chief Executive Officer and Chief Investment Officer, Thomas Capasse, will continue to lead the company and Ready Capital executives Jack Ross, Andrew Ahlborn, Gary Taylor and Adam Zausmer will remain in their current roles. Broadmark Chairman and Interim Chief Executive Officer Jeffrey Pyatt will join the Ready Capital team. The combined company will remain headquartered in New York, New York. The Board of the combined company is expected to increase by three Broadmark-designated directors to twelve directors. In case of termination, Broadmark will pay Ready Capital a termination fee of $15.760 million (representing approximately 2% of the announced equity value of the transaction) and Ready Capital will pay Broadmark a termination fee of $23.639 million (3% equity value of the transaction).

The transaction is subject to the respective approvals by the stockholders of Ready Capital and Broadmark, The Registration Statement shall have been declared effective by the SEC, shares to be issued in the Merger shall have been approved for listing on the NYSE and other customary closing conditions. The transaction has been unanimously approved by each of the Boards of Directors of Ready Capital and Broadmark. Ready Capital?s registration statement on Form S-4 was declared effective by the U.S. Securities and Exchange Commission on April 20, 2023. Ready Capital Corporation Stockholders and Broadmark Realty Capital shareholders approved the transaction on May 30, 2023. The transaction is expected to close during the second quarter of 2023. The Merger is expected to close on May 31, 2023, subject to customary closing conditions. Highly synergistic platforms and capital optimization will drive strong earnings per share accretion in 2024.

Wells Fargo Securities, LLC acted as exclusive financial advisor and Michael Kessler, David E. Brown, Julie Mediamolle, Sarah Ma, Shawna Tunnell, Brett Coburn, Blake MacKay, Kerry Wenzel and Blake Estes of Alston & Bird LLP acted as legal advisor to Ready Capital. Sebastian Tiller of Simpson Thacher & Bartlett LLP represented J.P. Morgan Securities LLC in its role as exclusive financial advisor to Broadmark. Scott Williams, Meenakshi Datta and Jessica Day of Sidley Austin LLP acted as legal advisor and Bryan Cave Leighton Paisner LLP acted as tax legal advisor to Broadmark. PricewaterhouseCoopers LLP and Sidley Austin LLP acted as due diligence provider to Broadmark. Alston & Bird LLP acted as due diligence provider to Ready Capital. Ready Capital has engaged Okapi as proxy solicitor to assist in the solicitation of proxies for the Ready Capital special meeting. Ready Capital estimates it will pay Okapi a fee of approximately $15,000. Broadmark has engaged Alliance Advisors as proxy solicitor to assist in the solicitation of proxies for the Broadmark special meeting. Broadmark estimates it will pay Alliance Advisors a fee of approximately $20,000. For services rendered by J.P. Morgan in connection with the Merger (including the delivery of its opinion), Broadmark has agreed to pay J.P. Morgan a fee of $10.0 million, $3.0 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion and the remainder of which is contingent and payable upon the consummation of the Merger. Ready Capital has agreed to pay Wells Fargo Securities an aggregate fee currently estimated to be approximately $7.5 million, $2.0 million of which became payable to Wells Fargo Securities at February 27, 2023, and the remainder of which is contingent and payable upon the consummation of the Merger. Computershare Trust Company, National Association and Computershare, Inc. acted as transfer agents to Ready Capital.

Ready Capital Corporation (NYSE:RC) completed the acquisition of Broadmark Realty Capital Inc. (NYSE:BRMK) from The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK) and others on May 31, 2023.