Redfin to buy Bay Equity Home Loans in $135M cash-and-stock deal

Redfin Corp. agreed to buy full-service licensed mortgage lender Bay Equity Home Loans for an estimated purchase price of $135 million in cash and stock, subject to closing adjustments.

The purchase price reflects a $72.5 million premium over Bay Equity's estimated tangible book value as of the end of 2021.

Originally based in the San Francisco Bay Area, Bay Equity operates in 42 states and has approximately 1,200 employees.

All Redfin Mortgage lending operations will be consolidated under Bay Equity, and some Redfin Mortgage employees will transfer to Bay Equity.

Redfin will eliminate 121 Redfin Mortgage positions, representing less than 2% of the company's total workforce.

The deal is expected to close during the second quarter and to be accretive to Redfin's 2022 earnings per share.

Keefe Bruyette & Woods and Stifel are the financial advisers to Redfin.