Ready Capital acquires Madison One to bolster USDA lending operations

Ready Capital Corporation (NYSE: RC), a prominent multi-strategy real estate finance company, has significantly expanded its market presence by acquiring Madison One Capital, M1 CUSO, and Madison One Lender Services (collectively known as “Madison One”). Although the terms of the transaction were not disclosed, this acquisition is pivotal as Madison One is a leading player in the profitable government-guaranteed loan industry, specifically in United States Department of Agriculture (USDA) and Small Business Administration (SBA) loan products.

Impact of the Acquisition on Ready Capital’s Business Strategy

The addition of Madison One aligns with Ready Capital’s strategic goals to diversify revenue sources and augment the scale of its gain-on-sale businesses. Ready Capital is already recognized as the fourth largest originator of SBA 7(a) loans. This acquisition is expected to generate more than $300 million in USDA volume annually, enhancing Ready Capital’s offerings in government-guaranteed small business loans and boosting its gain on sale earnings.

Statements from Company Executives

Thomas Capasse, CEO of Ready Capital, expressed enthusiasm about the acquisition, stating, “We’re excited to acquire Madison One, a leading USDA loan originator and servicer. This transaction expands our government-guaranteed small business offerings, while increasing the Company’s gain on sale earnings.” From Madison One, Managing Director Jason Bengert highlighted the operational benefits, noting, “Partnering with Ready Capital gives Madison One a direct balance sheet, enabling growth of our USDA platform and more flexible financing for rural clients.”

Integration and Future Prospects

Madison One will continue to operate under its established brand as a subsidiary of Ready Capital, with its entire team joining the new subsidiary. This integration is overseen by ReadyCap Lending, with Gary Taylor as the CEO. The synergy between the two companies is anticipated to drive substantial growth and extend more capital into rural America, according to Chris Balestrino, another Managing Director at Madison One.

Advisors and Legal Counsel

In this transaction, Ready Capital was advised by Harbor View Advisors, and legal counsel was provided by Alston & Bird LLP. Madison One received guidance from Burntside Advisors with legal support from the Lewis Firm.

Based in New York, Ready Capital Corporation is involved in various facets of real estate finance including agency multifamily, investor, construction, and bridge loans. It is also a notable provider of U.S. Small Business Administration loans under its Section 7(a) program, employing about 350 professionals across the U.S.

Operating out of Scottsdale, Arizona, Madison One is a renowned originator and servicer specializing in USDA and SBA guaranteed loan products, with a dedicated team of 30 professionals.