Pontiac-based United Wholesale Mortgage, the top wholesale mortgage lender in the U.S., and Gores Holdings IV, Inc., have entered into a merger the parties say will be worth some $16.1 billion.
The deal was announced in a news release Wednesday morning. Upon completion of the proposed transaction, the combined company will operate under the UWM name and the Class A common stock will be listed on NASDAQ under the new ticker symbol “UWMC.”
Gores Holdings IV is run by Alec Gores, the brother of Detroit Pistons owner Tom Gores. The transaction values UWM at approximately $16.1 billion, or 9.5 times the company’s estimated 2021 value of approximately $1.7 billion.
Founded in 1986 and based in Pontiac, Michigan, UWM – which operates under the brand name United Shore — is the largest wholesale mortgage originator in the United States with nearly 7,000 dedicated team members. UWM’s differentiated business model focuses exclusively on providing wholesale mortgage clients superior service through proprietary technology that enables them to process mortgage applications at faster speeds and provide lower rates than competitors.
Mat Ishbia, President and Chief Executive Officer of UWM, said, “Becoming a public company will enable us to advance our strategy and capitalize on new opportunities to expand our already established leadership in the mortgage industry under our unique family culture, which has been the cornerstone of our company’s success for the last 34 years,” said Mat Ishbia, president and CEO of UWM. “To that end, we look forward to granting our team members equity in the Company that they have helped build and enabling them to participate in our future success. We believe that being a public company will also allow us to help our mortgage broker clients continue to build and grow their businesses, generating value for all of our stakeholders. Working with the Gores team has been a great benefit in helping to make this transaction possible.”
Alec Gores said his group was “pleased to partner with UWM” in what he called a “milestone transaction.“
“(Ishbia) and his team have built an impressive organization that is the market leader in wholesale lending and has a strong focus on culture and delivering quality service and offerings for its customers,” Gores said. “As a public company, UWM will be well-positioned given its significant competitive advantages and we look forward to working together to accelerate the next phase of growth and to drive value for all of our stakeholders.”
Mark Stone, Chief Executive Officer of Gores Holdings IV, said the transaction “clearly stood out as a superior option” after the evaluation of other potential partners.
“The public company currency of a newly listed business will enable the company to continue to benefit from the ongoing tailwinds in the mortgage industry and capitalize on growth opportunities in a massive addressable market,” Stone said. “We are excited to participate in UWM’s continued value creation through a meaningful remaining equity stake in the business.”
Gores Holdings IV, Inc. is a publicly listed, $425 million “special purpose acquisition company” and is the fifth vehicle sponsored by an affiliate of The Gores Group, a global investment firm founded by Alec Gores.
The combined company will have an equity value of approximately $16.1 billion at closing, expected in the fourth quarter, making it the largest business combination for a special purpose acquisition company to date. Along with approximately $425 million in cash held in Gores Holdings IV’s trust account, additional investors have committed to participate in the proposed business combination via a $500 million private placement, led by Alec Gores, Chairman and CEO of The Gores Group, and including large institutional investors. The proposed business combination has been unanimously approved by the boards of directors of both Gores Holdings IV and the Company, subject to customary closing conditions, including the receipt of regulatory approvals, and approval of the stockholders of Gores Holdings IV. Upon closing of the proposed business combination, the name of Gores Holdings IV will be changed to UWM Corporation.