Dan Gilbert, CEO, Quicken Loans
Anjali Sundaram | CNBC
Quicken Loans, the largest mortgage lender in America, is planning an initial public offering, according to people familiar with the matter.
The company, founded and owned by Detroit-billionaire Dan Gilbert, has filed its IPO prospectus confidentially, the people said, and may flip it to be public as soon as next month.
Quicken Loans is working with Morgan Stanley, Goldman Sachs, Credit Suisse and JPMorgan to manage the deal, said the people, who asked not to be named discussing private information. The targeted valuation is still being decided, but it is likely in the tens of billions of dollars, one of the people said. That would imply a multi-billion-dollar IPO, one of the largest – if not the largest – this year.
The company is personified by Gilbert, who started the predecessor of the company 35 years ago. He’s the chairman and majority owner of the NBA’s Cleveland Cavaliers and credited with revitalizing downtown Detroit. Gilbert and his wife joined Warren Buffett, and Bill and Melinda Gates’ “Giving Pledge,” to donate a majority of their wealth to charity. Forbes pegged Gilbert’s wealth at $7.8 billion.
Mortgage rates set a new record low on Thursday thanks to falling interest rates, with the average rate on a 30-year fixed mortgage reaching 2.97 percent, according to Mortgage News Daily. Low rates have encouraged homeowners to refinance.
Quicken Loans CEO Jay Farner said on CNBC in mid-April that March was the “biggest closing month in our company’s history — nearly $21 billion in mortgages closed.” He said on CNBC that the company was estimating nearly $75 billion in mortgage applications in the second quarter, compared with almost $53 billion in the first quarter.
Quicken Loans, Morgan Stanley, Goldman Sachs, Credit Suisse and JPMorgan declined to comment on the company’s plans for an IPO.
The window for initial public offerings has burst open in recent days, with debut listings from Warner Music Group, ZoomInfo and Vroom soaring on their first days of trading. That has encouraged other companies to jumpstart their processes to take advantage of a broader equity market that seemed hospitable to new issuances.
Volatility is the enemy of IPOs, however, and that spiked on Thursday as the market sold off.
In late May of 2019, Gilbert suffered an ischemic stroke on the right side of his brain, according to an interview he gave to Crain’s Detroit Business in February. He is working on improving his strength and motor skills that were impaired by the stroke, the article said.