Irving-based real estate investment trust United Development Funding IV is being acquired by New York-based Ready Capital Corp., 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.
United Development Funding IV (UDF IV) provides capital solutions to residential real estate developers and regional homebuilders. Upon completion of the transaction, Ready Capital said it anticipates having a pro forma equity capital base in excess of $2.2 billion.
“This transaction marks an exciting milestone for UDF IV that will provide significant value and liquidity to our shareholders,” James Kenney, managing trustee and CEO of UDF IV, said in a statement. “The transaction enables us to make a meaningful cash distribution to our shareholders, who will also benefit from ownership in a scaled, diversified, and publicly traded industry leader.”
Terms and benefits of the deal
Under the terms of the agreement, UDF IV will be permitted to distribute up to $75 million of cash on its pre-closing balance sheet to its shareholders prior to the transaction closing, representing value distributed by UDF IV to its shareholders of up to $2.44 per share.
In addition, as part of the merger consideration, UDF IV shareholders will be entitled to receive additional stock consideration after closing under contingent value rights to be issued by Ready Capital, which UDF IV management estimates will generate payments of up to $0.38 per UDF IV share over time before any accrued dividends related to such Ready Capital shares are paid.
“The UDF IV transaction will allow us to scale our portfolio and expand our core business, unlocking exciting growth and value creation opportunities,” Thomas Capasse, chairman and CEO of Ready Capital. “The acquisition of UDF IV will further differentiate our ability to provide investors and borrowers with a range of financing solutions, and we expect to leverage our resources to drive growth in the land development vertical.”
The combined company will operate under the name Ready Capital and its shares are expected to continue trading on the New York Stock Exchange under the existing ticker symbol “RC.” Waterfall Asset Management LLC will continue to manage the combined company.
Get on the list.
Dallas Innovates, every day.
Sign up to keep your eye on what’s new and next in Dallas-Fort Worth, every day.
R E A D N E X T
-
Mobility startups from coast to coast—including those focused on innovative ideas to transport people or goods—are invited to apply. The unique accelerator program supports startups in the automotive ecosystem, ranging from AI-powered industry solutions and transportation infrastructure to dealer support and related services.
-
In 2023, founders searching for venture capital found fewer investors and less money. Pitchbook reports that the number of U.S. deals in the first three quarters of 2023 was just slightly higher than the number made during the same period in 2018. In North Texas, it was a similar story. But even as investment markets have tightened, Dallas-based Beyond Capital is working to reverse that trend by investing in more startups. In the first quarter of 2024, it’s opening its third fund to new investors. Beyond Capital looks for startups in need of Seed to Series A investment. What…
-
In a world reshaped by remote work and virtual services, do Americans still believe that owning a car is essential to getting ahead? Researchers investigated how vehicle ownership impacts upward mobility post-pandemic—from employment to social benefits.
-
The newly established Texas Capital Foundation is following the first round of grant awards by opening again for new submissions this November.
-
PMB Capital and the city of Sachse engineered a new kind of public space where train-themed attractions anchor The Station's $500 million mixed-use vision. The 34-acre park bridges the city's rail heritage with boardwalks leading to shops and restaurants.
