Ready Capital Officially Completes Major Merger with UDF IV—Here's What Changed

Ready Capital Corporation (NYSE: RC), a prominent real estate finance player, has officially finalized its acquisition of United Development Funding IV, marking a significant milestone in the company’s expansion strategy. The deal, which took effect following the merger agreement signed on November 29, 2024, reshapes the combined entity’s market position while maintaining Ready Capital’s NYSE listing under ticker symbol RC.

The Exchange Structure: What UDF IV Shareholders Received

In this transaction, each UDF IV share underwent a conversion formula. Former UDF IV shareholders received 0.416 shares of Ready Capital Common Stock ($0.0001 par value), plus an equivalent number of contingent value rights (CVRs). These CVRs are structured as rights to potential additional stock payouts, contingent on cash proceeds from a designated portfolio of five UDF IV loans over multiple periods: the first measurement window runs from October 1, 2024, through December 31, 2025, followed by three subsequent calendar years. This performance-tied payout structure essentially ties future shareholder returns to the loan portfolio’s financial performance—a mechanism that aligns incentives between the merged entity and former UDF IV investors.

The company handled fractional share situations by issuing cash in lieu of fractional Ready Capital shares, ensuring smooth settlement across all converted holdings.

Ready Capital’s Growth Ambitions Post-Merger

Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer, highlighted the strategic rationale: the combined platform positions the company to scale operations, expand its core lending business, and capitalize on emerging value creation opportunities. Ready Capital specializes in lower-to-middle-market commercial real estate financing, with expertise spanning agency multifamily loans, investor properties, construction financing, bridge loans, and SBA Section 7(a) program lending.

Headquartered in New York, Ready Capital operates with approximately 350 professionals distributed nationwide, giving the merged entity substantial operational capacity to execute on growth initiatives.

Forward-Looking Considerations

Like any major corporate transaction, the merger carries execution risks and uncertainties. Critical factors that could influence outcomes include loan performance across the five specified UDF IV assets, litigation developments, management integration challenges, interest rate movements, prepayment dynamics, and broader macroeconomic conditions. Investors tracking Ready Capital should monitor these variables as the company integrates UDF IV’s lending platform into its existing operations.

The advisory teams—Piper Sandler & Co. (Ready Capital’s financial advisor), Alston & Bird LLP (legal counsel), Moelis & Company LLC (UDF IV’s financial advisor), Gibson, Dunn & Crutcher LLP (UDF IV legal counsel), and Holland & Knight LLP (special committee counsel)—facilitated a comprehensive transaction process.

Ready Capital Corporation’s symbol (RC) remains unchanged on the New York Stock Exchange, offering continuity for existing market participants while the merged entity moves forward.