Friday 22 January 2021

US-based wholesale and purchase mortgage lender United Wholesale Mortgage, LLC (UWM) has combined with US-based special purpose acquisition company Gores Holdings IV, Inc. to strengthen position in residential mortgage market, the company said.

The deal was valued at approximately USD 16bn and is the largest SPAC transaction to date. In connection with the closing, Gores Holdings IV changed its name to UWM Holdings Corp. and is trading on the New York Stock Exchange (NYSE) under the new ticker symbol UWMC.

In connection with the closing of the Business Combination, UWM has received approximately USD 925m of gross proceeds which includes approximately USD 425m of cash from Gores Holdings IV, as well as USD 500m in proceeds from the private placement completed in connection with the Business Combination, which included top-tier institutional investors.

Upon completion of the transaction, including the private placement, the current owners of UWM will retain approximately 94% ownership of the combined company.

The successful closing of the transaction builds on the momentum UWM has achieved over the past several months.

UWM has realised record third quarter earnings, with originations exceeding USD 54.2bn in mortgage volume, net income of USD 1.45bn and production volume exceeding the total 2019 production record.

Goldman Sachs and Co. LLC acted as financial advisor to UWM. Greenberg Traurig, LLP acted as legal advisor to UWM.

Deutsche Bank Securities and Morgan Stanley and Co. LLC acted as lead financial advisors, lead capital market advisors and exclusive private placement agents to Gores Holdings IV, while Moelis and company LLC acted as financial advisor. Weil, Gotshal and Manges LLP acted as legal advisor to Gores Holdings IV.

UWM Holdings Corp. is the publicly traded indirect parent of United Wholesale Mortgage. UWM underwrites and provides closing documentation for residential mortgage loans originated by independent mortgage brokers, correspondents, small banks and local credit unions.

Gores Holdings IV, Inc. is a special purpose acquisition company sponsored by an affiliate of The Gores Group for the purpose of effecting a merger, acquisition, or similar business combination.