Ready Capital Corporation · NYSE:RC
Ready Capital — Merger or Acquisition (December 2024)
22 slides from Ready Capital's merger presentation, Dec 2, 2024
Slide 1: Ready Capital Corporation to Acquire United Development Funding IV
READY CAPITAL CORPORATION TO ACQUIRE UNITED DEVELOPMENT FUNDING IV December 2, 2024
Slide 2: Disclaimer
Disclaimer 2 These materials and any presentation of which they form a part are neither an offer to sell, nor a solicitation of an offer to purchase, an interest in Ready Capital Corporation (“Ready Capital,” “RC,” or the “Company”) . In connection with the proposed merger, United Development Fundin
Slide 3: Agenda
Agenda Introduction I. Transaction Summary and Benefits to Stakeholders II. United Development Funding IV Portfolio Overview III. 3
Slide 4: Introduction
Introduction
Slide 5: Overview of Ready Capital Corporation
Overview of Ready Capital Corporation 5 Overview of Ready Capital Key Statistics 4 Investment Portfolio Breakdown 6 Market Segment Overview • Ready Capital Corporation (NYSE: RC) (“Ready Capital” or the “Company”) is a non - bank lender to both investors in and owners of lower - to - middle - market
Slide 6: Waterfall – A Successful & Proven Asset Manager
Asset - Backed Securities 60% Ready Capital 18% Loans 17% Real Estate 4% Private Equity 1% Waterfall – A Successful & Proven Asset Manager 6 • SEC - registered credit investment advisor founded in 2005 • Top global manager with focus on real estate loans & ABS • Principals were early pioneers of the
Slide 7: Overview of UDF IV
7 Overview of UDF IV Overview of UDF IV 1) Zonda Q3 2024 Top 25 Housing Starts Markets report. UDF IV Business Model 1 2 3 4 Raw Land Acquisition Entitled Land & Lot Development Finished Lot Sales Home Construction & Sale UDF IV invests in secured loans and makes strategic investments throughout sta
Slide 8: Combined History of Ready Capital & UDF IV
Combined History of Ready Capital & UDF IV 8 Jul ‘14 - Sep ‘16 Waterfall provides $50M senior secured note financing in 2014 that was fully repaid in 2016 Jun ’21 - Dec ‘22 RC and UDF IV enter into merger discussions and enter into Definitive Agreement Sep ’18 - Dec ‘19 Nov - Dec ‘20 Aug ‘21 Jan ‘22
Slide 9: Transaction Summary and Benefits to Stakeholders
Transaction Summary and Benefits to Stakeholders
Slide 10: Transaction Summary
Transaction Summary 10 • Stock - for - stock acquisition of UDF IV by Ready Capital Transaction Summary • UDF IV shareholders will receive up to $75 million in cash distributions, or up to $2.44 per share, funded from the UDF IV pr e - closing balance sheet, subject to payment of all UDF IV transact
Slide 11: Strategically and Financially Compelling Benefits to Stakeholders
Strategically and Financially Compelling 11 Benefits to Ready Capital Stakeholders Benefits to UDF IV Stakeholders Meaningful Upfront Cash Distribution The transaction facilitates significant cash distributions to UDF IV shareholders, estimated to be up to $2.44 per share between now and closing of
Slide 12: Highly Attractive Transaction Economics
Highly Attractive Transaction Economics 12 • Implied upfront stock consideration (excluding the CVR) based on Ready Capital’s closing stock price as of November 29, 2024 is $94 million, or $3.07 per UDF IV share o The exchange ratio for the upfront stock consideration was negotiated using a tangible
Slide 13: Projected Asset Cash Flows
Projected Asset Cash Flows 13 Municipal Reimbursements • Asset - level cash outflows for the loans in UDF IV’s portfolio primarily consists of future funding requirements • Asset - level cash inflows primarily consists of interest and principal repayments • The borrowers for the acquired loans typic
Slide 14: Description of Contingent Value Right
Description of Contingent Value Right 14 Overview: UDF IV shareholders will receive a non - transferable CVR that has rights to 60% of any cash proceeds received between closing and December 31, 2028, from select loans in excess of the outstanding principal amount (~$13.3 million) of such loans an d
Slide 15: United Development Funding IV Portfolio Overview
United Development Funding IV Portfolio Overview
Slide 16: UDF IV Portfolio Summary
UDF IV Portfolio Summary 16 • As of November 15, 2024, UDF IV’s portfolio consists of 23 loans located across the DFW, Houston, and San Antonio metros in T exa s • The underlying collateral is all fully entitled and the majority consists of paper lots that will be or are in the process of be ing dev
Slide 17: Asset Overview | Loan
Asset Overview | Loan 2 17 • $76.6M gross book value of principal and accrued interest secured by ± 995 acres of fully entitled land planned for ± 1,543 next phase lots of a 4,400 - home master - planned mixed - use residential community in the DFW market with new homes ranging from $300k - $700k. •
Slide 18: Asset Overview | Loans
Asset Overview | Loans 11 - 21 18 • $36.1M gross book value of principal and accrued interest secured by ± 360 acres fully entitled land planned for the final ± 1,317 lots of a ± 3,278 home master - planned community in the DFW market • The project is located within a Municipal Utility District with
Slide 19: Asset Overview | Loan
Asset Overview | Loan 22 19 • $27.6M gross book value of principal and accrued interest financing a land banking transaction for ± 1,506 acres of entitled land to be developed into phases 2+ of a ± 1,853 - acre master - planned residential community in the DFW market with new homes ranging from $300
Slide 20: Dallas-Fort Worth Market | Housing Trends
Dallas - Fort Worth Market | Housing Trends 20 New Home Sales Total Housing Inventory • According to Milken Institute’s Best - Performing Cities 2024 report published in February 2024, Dallas was ranked 8 th in the nation among best - performing large - tier cities and second only to Austin in the s
Slide 21: Dallas-Fort Worth Market | Population Trends
Dallas - Fort Worth Market | Population Trends 21 Population Growth: 1958 - 2023 (Indexed to 1958) Population Growth: Average Annual Percent Change by Decade Population Growth: 1958 - 2023 (Indexed to 1969) Population Growth: Average Annual Percent Change by Decade • Texas and the Dallas - Fort Wort
Slide 22: Slide 22
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