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UWM Announces Launch of Secondary Offering and Concurrent Stock Repurchase
Rhea-AI Impact
(Moderate)
Rhea-AI Sentiment
(Neutral)
Tags
buyback
Rhea-AI Summary
UWM Holdings Corporation (NYSE:UWMC) announces a secondary offering of 50 million shares of Class A common stock by its controlling shareholder, SFS Holding Corp. The offering proceeds will go directly to SFS, while UWM intends to buy back $100 million in equity interests from SFS as part of its $300 million stock repurchase program. This buyback will utilize existing cash. J.P. Morgan and BofA Securities are managing the offering, with the registration statement pending effectiveness. The buyback's purpose is to enhance shareholder value and maintain equity structure.
Positive
Utilization of $100 million from the repurchase program enhances shareholder value.
The concurrent buyback indicates management's confidence in the company's equity value.
Negative
The secondary offering could dilute existing shareholders' equity.
Proceeds from the offering will not benefit UWM, raising concerns over financial implications.
PONTIAC, Mich.--(BUSINESS WIRE)--
UWM Holdings Corporation (NYSE:UWMC) (the “Company”) today announced that SFS Holding Corp., (“SFS”) its controlling shareholder, intends to offer for sale in an underwritten secondary offering 50,000,000 shares of the Company’s Class A common stock (the “Class A Common Stock”), pursuant to a registration statement filed by UWM Holdings with the U.S. Securities and Exchange Commission (the “SEC”). No shares are being sold by UWM. SFS will receive all of the proceeds from this offering.
In addition, the Company announced that, concurrently with the pricing of the offering, it intends to utilize $100 million of its existing $300 million stock repurchase program to purchase, through its subsidiary UWM Holdings LLC, an incremental $100 million of SFS’s equity interests in the Company (which are convertible on a one for one basis into shares of Class A Common Stock) at a price per share equal to the price at which the underwriter will purchase the shares from SFS in the offering (the “Concurrent Buyback”). The terms and conditions of the Concurrent Buyback were reviewed and approved by the Company’s Audit Committee, acting as a special committee of the Company’s board of directors comprised of independent and disinterested directors. The Company intends to fund the Concurrent Buyback from existing cash on hand. The underwriters will not receive any compensation for the equity interests being repurchased by the Company.
J.P. Morgan and BofA Securities are acting as joint lead book-running managers in the offering.
A registration statement on Form S-1 relating to these securities has been filed with the SEC, but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time that the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The offering of these securities will be made only by means of a prospectus supplement and accompanying prospectus. Copies of the preliminary prospectus supplement and accompanying prospectus for the offering may be obtained from J.P. Morgan Securities, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-212-834-4533 or BofA Securities, NC1-004-03-43; 200 North College Street, 3rd Floor, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department or by email at dg.prospectus_requests@bofa.com. You may also obtain these and the other documents referred to above for free by visiting the SEC's website at www.sec.gov.
About UWM Holdings Corporation and United Wholesale Mortgage
Headquartered in Pontiac, Michigan, UWM Holdings Corporation is the publicly traded indirect parent of United Wholesale Mortgage, LLC (“UWM”). UWM is the largest wholesale mortgage lender in the United States, originating mortgage loans exclusively through the wholesale channel. With a culture of continuous innovation of technology and enhanced client experience, we lead our market by building upon our proprietary and exclusively licensed technology platforms, superior service and focused partnership with the independent mortgage broker community. UWM focuses on providing highly efficient, accurate and expeditious lending support. We originate primarily conforming and government loans across all 50 states and the District of Columbia.
Forward Looking Statements
This press release includes forward-looking statements regarding the offering of the Shares by SFS and the Concurrent Buyback. Forward-looking statements include statements identified by terms such as “expect,” “anticipate,” “believe,” “outlook,” “may,” “should,” “target” or similar terms and variations thereof. These forward-looking statements may be affected by risks and uncertainties in the Company’s business and market conditions. The Company wishes to caution readers that certain important factors may have affected and could in the future affect UWM's actual results and could cause the Company’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company, including the risk that the offering of the shares of Class A Common Stock by SFS or the Concurrent Buyback cannot be successfully completed. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.
What is the purpose of UWM's secondary offering of 50 million shares?
The secondary offering is intended to allow SFS Holding Corp. to sell shares while UWM simultaneously conducts a buyback of $100 million in equity interests.
How much of the stock repurchase program is being utilized in the buyback?
UWM is utilizing $100 million of its $300 million stock repurchase program for the buyback of SFS's equity interests.
Who is managing the secondary offering for UWM Holdings Corporation?
J.P. Morgan and BofA Securities are acting as joint lead book-running managers for the offering.
What impact could the secondary offering have on existing shareholders of UWMC?
The secondary offering could dilute existing shareholders' equity since it involves new shares being sold by SFS.
When will the registration statement for the offering become effective?
The registration statement has been filed but has not yet become effective, meaning no shares can be sold until it is approved.
