United Wholesale Mortgage made its public offering on Friday, the largest listing ever by a specialty procurement firm.
Gores Holdings IV Inc. ‘s shareholders this week approved a merger with the company, now called UWM Holdings Corp, in an agreement to announce it at a valuation of nearly $ 16 billion. According to data provider SPACInsider, this is a record for SPAC transactions, which has become the rage on Wall Street.
The Michigan-based mortgage company, which traded on the New York Stock Exchange under the symbol UWMC, closed at $ 11.35 on Friday, slightly below Gores Holdings’ closing price of $ 11.54 on Thursday.
SPACs, also known as blank check companies, are reversing the conventional model for public offerings by raising money before developing a business. They use the funds to make an acquisition that turns the target into a public company. Once the blankcheck company, such as Gores Holdings and UWM, merged with a target company on Thursday, the company gets the SPAC’s place on a stock exchange, which enables it to sell shares to the public.
UWM works with independent brokers across the country to underwrite and service mortgage loans. It is one of a number of non-bank mortgage companies embracing the public markets at a booming time for the US housing market. The low interest rates helped push the origins of mortgage lending to a record level in 2020. UWM was the third largest mortgage lender in the U.S. in the first three quarters of 2020, according to research group Inside Mortgage Finance.