Startup mortgage lender Better, whose valuation has swelled in the private markets, said Tuesday that it plans to go public by merging with a special-purpose acquisition company.
Better Holdco Inc., which operates a digital platform for mortgages and related services, plans to merge with Aurora Acquisition Corp.
, a SPAC sponsored by the investment firm Novator Capital, the companies said. The deal, reported Monday by the Wall Street Journal, values Better at roughly $6.9 billion pre-new money, up from $4 billion late last year.
SoftBank Group Corp.
, which recently invested $500 million in Better as part of a deal making sprint, could put in an additional $1.3 billion through what is known as a PIPE, or private investment in public equity, a common feature of SPAC mergers. (Better could place $400 million of that with other investors.) The remaining $200 million of the $1.5 billion PIPE is to come from Aurora, whose sponsor is the investment vehicle of Icelandic billionaire Thor Bjorgolfsson.
Better would raise nearly $800 million in new capital in the deal, with an additional roughly $950 million in proceeds going to cash out existing shareholders. As part of the transaction, customers who previously took out a mortgage from Better would be able to buy stock in the company through a direct share purchase program. Better’s co-founder and chief executive, Vishal Garg, wouldn’t sell shares in the offering.
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