The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, March 31 (Reuters Breakingviews) - Spring is the start of the home-buying season. The same apparently goes for Rocket Companies’ RKT.N dealmaking schedule. The home lending-focused financial technology conglomerate started by Detroit’s Dan Gilbert agreed to buy mortgage servicer Mr. Cooper COOP.O for $9.4 billion in an all-stock transaction. It is Rocket’s second purchase in a month as it aims to build a one-stop shop for house hunters. That makes some sense, but the binge squeezes existing investors.

On Monday, Rocket offered Mr. Cooper shareholders the equivalent of $143.33 per share, a 37% premium to the seller’s unaffected stock price and leaving its investors owning a quarter of the newly combined company. This comes on the heels of Rocket’s transaction earlier in March to buy digital real estate listing platform Redfin RDFN.O for $1.8 billion, again in stock.

Putting Mr. Cooper under Rocket’s roof keeps borrowers on the hook for longer, maintaining a relationship as they eventually look to refinance, tap their houses for equity or service a loan for their next purchase.

Rocket said it will be able to squeeze a chunky $400 million in cost savings from Mr. Cooper. Taxed at the target’s effective rate and capitalized, the synergies represent nearly $3 billion in net present value, covering the premium of $2.5 billion. Yet Rocket’s shareholders get only 75% ownership of that sum, leaving them short. The deal assumes that Rocket can achieve an additional $100 million in profit bumps from revenue synergies, or opportunities to clinch sales that the companies couldn’t separately, often a much trickier proposition. Without that benefit, the math doesn’t quite stack up. Rocket’s assumed profit boosts from the Redfin tie-up also looked aggressive.

The buyer’s shares promptly fell 9% on Monday, a similarly sour reaction to the 15% tumble on announcing the purchase of Redfin. It makes sense: Rocket is a controlled company, leaving independent shareholders no say as they get diluted by the issuance of stock equivalent to a massive 40% of its shares outstanding for both transactions. Gilbert’s home renovations leave less and less room for existing lodgers.

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CONTEXT NEWS

Rocket Companies, a conglomerate including lender Rocket Mortgage as well as various other assets like home search platform Rocket Homes, said on March 31 it has agreed to buy Mr. Cooper Group for $9.4 billion in an all-stock deal.

The exchange ratio values Mr. Cooper, a mortgage servicing company, at $143.33 per share, a 37% premium to Mr. Cooper’s undisturbed price on March 28.

Rocket also agreed to buy real estate brokerage Redfin in an all-stock deal for $1.8 billion on March 10.

JPMorgan is acting as Rocket’s financial advisor and Paul Weiss is its legal counsel.

(Editing by Jonathan Guilford and Maya Nandhini)

((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))