Rocket Companies announces collapse of ‘Up-C’ structure

Rocket Companies (RKT) announced earlier that it has entered into an agreement to simplify its organizational and capital structure. Under the agreement, Rocket Companies will collapse its current “Up-C” structure, eliminate its high-vote / low-vote structure and reduce its classes of common stock from four to two. Following the Up-C Collapse, the public stockholders will continue to hold their current shares of common stock, while Dan Gilbert and the other stockholders of Rock Holdings Inc. will hold shares of common stock directly in Rocket Companies, instead of through RHI, and will no longer hold limited liability company units of Rocket, LLC, the principal operating subsidiary of Rocket Companies. Additionally, shares of common stock to be directly held by Dan Gilbert and other stockholders of RHI will carry one vote per share, as opposed to the 10 votes per share of the Class D common stock they currently hold, and will be subject to a lock up. The Up-C Collapse will simplify Rocket’s organizational structure, enhancing equity liquidity, improving its ability to use its common stock as acquisition currency in acquisition transactions, including the acquisition of Redfin (RDFN), and creating a clearer corporate profile.