(Reuters) – United Wholesale Mortgage (UWM) said on Wednesday it has agreed to go public by merging with special purpose acquisition company (SPAC) Gores Holdings IV Inc GHIV.O in a deal that will value the wholesale mortgage lender at $16.1 billion.
It is the most highly-valued company ever acquired by a SPAC and comes amid a boom of deals by blank-check acquisition companies in 2020.
Under the agreement, UWM will retain about 94% ownership of the combined company and will get about $425 million in cash held in Gores’ trust account along with $500 million from a private placement. It plans to use the proceeds to invest in its technology platform and marketing.
United Wholesale Mortgage, one of the largest mortgage originators in the United States, had been exploring going public to access extra capital, and opted for the SPAC route after meeting with the Gores Group in April, UWM Chief Executive Mat Ishbia told Reuters in an interview.
“SPAC is the most efficient and certain way to go public if you have the right partner,” said Ishbia, who added limited dilution is also part of the consideration. “I believe there’s a lot of upside in it and I can derive that success by still owning 94% and continue to grow.”
This is the fourth SPAC merger announced by the Gores Group, and comes a month after Gores’ other SPAC, Gores Metropoulos Inc, merged with autonomous vehicle sensor firm Luminar with plans to go public in the fourth quarter. Gores Group raised $400 million for its fifth SPAC in July.
“One of the benefits of SPAC over an IPO is flexibility and structure,” said Mark Stone, chief executive of Gores Holdings IV.
Once the deal is completed, the combined company will be listed on Nasdaq and named UWM Corp, the Michigan-based company said.
SPACs, also known as blank-check firms, are shell companies that raise funds through an initial public offering (IPO), with an intention to acquire a private company.
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Home » Analysis & Comment » United Wholesale agrees merger with Gores Holdings to go public
United Wholesale agrees merger with Gores Holdings to go public
(Reuters) – United Wholesale Mortgage (UWM) said on Wednesday it has agreed to go public by merging with special purpose acquisition company (SPAC) Gores Holdings IV Inc GHIV.O in a deal that will value the wholesale mortgage lender at $16.1 billion.
It is the most highly-valued company ever acquired by a SPAC and comes amid a boom of deals by blank-check acquisition companies in 2020.
Under the agreement, UWM will retain about 94% ownership of the combined company and will get about $425 million in cash held in Gores’ trust account along with $500 million from a private placement. It plans to use the proceeds to invest in its technology platform and marketing.
United Wholesale Mortgage, one of the largest mortgage originators in the United States, had been exploring going public to access extra capital, and opted for the SPAC route after meeting with the Gores Group in April, UWM Chief Executive Mat Ishbia told Reuters in an interview.
“SPAC is the most efficient and certain way to go public if you have the right partner,” said Ishbia, who added limited dilution is also part of the consideration. “I believe there’s a lot of upside in it and I can derive that success by still owning 94% and continue to grow.”
This is the fourth SPAC merger announced by the Gores Group, and comes a month after Gores’ other SPAC, Gores Metropoulos Inc, merged with autonomous vehicle sensor firm Luminar with plans to go public in the fourth quarter. Gores Group raised $400 million for its fifth SPAC in July.
“One of the benefits of SPAC over an IPO is flexibility and structure,” said Mark Stone, chief executive of Gores Holdings IV.
Once the deal is completed, the combined company will be listed on Nasdaq and named UWM Corp, the Michigan-based company said.
SPACs, also known as blank-check firms, are shell companies that raise funds through an initial public offering (IPO), with an intention to acquire a private company.
Source: Read Full Article