Home Point looks to raise $301 million in its IPO

Home Point Capital's initial public offering could raise over $301 million for the sellers if the transaction goes off in the expected price range.

The Ann Arbor, Mich.-based company updated its Security and Exchange Commission filing to detail the sale of 12.5 million shares, plus an additional 1.875 million share underwriters' option to be priced between $19 and $21 per share.

However the last two companies to go the IPO route, Rocket Cos. and Guild Holdings, both downsized and cut their per-share prices. UWM Holdings, which started trading on Friday morning, went public via a merger with special purpose acquisition company Gores Holdings IV and assumed its stock valuation when that deal closed.

Home Point will not receive any proceeds from the IPO. After the deal is completed, entities affiliated with Stone Point Capital, will receive the majority of the proceeds. Currently they own 94% of Home Point's equity. After the IPO, they will control 88.4% of the voting equity (87% if underwriters' option is exercised).

Willie Newman, the company's president and CEO, is scheduled to sell 185,966 of the nearly 2.09 million shares he owns of Home Point.

Andrew Bon Salle, who just joined Home Point as its chairman from his former role heading up Fannie Mae's single-family business, is selling 12,000 shares of his 134,818-share stake in the company.

The prospectus lists Bon Salle as the company's executive chairman; there is a consulting agreement between him and Home Point through Dec. 31, 2022, with automatic one-year renewals. Bon Salle will receive a $500,000 annual consulting fee, plus will be eligible for an annual bonus based on performance targets.

After going public, Home Point will set aside 6.94 million shares for future issuance under the 2021 Incentive Plan and 1.39 million shares of common stock to be issued as part of the 2021 Employee Stock Purchase Plan.

Home Point also recently had a successful debt sale.

On Jan. 19, Home Point closed a $550 million senior notes offering (upsized from the announced $500 million). The notes are due in 2026 and have a 5% interest rate. Up to 50% of the proceeds were used to fund a distribution to the company's current owners, with the rest to repay any outstanding amount on its mortgage servicing rights facility.