09:11 AM EST, 12/02/2024 (MT Newswires) -- Ready Capital ( RC ) signed a definitive agreement to acquire United Development Funding IV, the companies said Monday in a joint statement.

United Development Funding IV will distribute up to $75 million of cash, or up to $2.44 per share, on its pre-closing balance sheet to its stockholders before the transaction closes, the companies said.

Each share of UDF IV will be converted into 0.416 Ready Capital ( RC ) shares, with an implied value of approximately $94 million or $3.07 per UDF IV share, the companies said, adding that UDF IV shareholders are expected to own about 7% of Ready Capital's ( RC ) outstanding shares at closing.

The companies said UDF IV shareholders are entitled to receive up to $5.89 per UDF share through a combination of the pre-closing distributions, shares issued at closing by Ready Capital ( RC ) and contingent value rights, which UDF IV estimates would generate payments of up to $0.38 for each of its shares over time.

The CVR provides the right to receive additional Ready Capital ( RC ) shares worth 60% of any cash received from certain UDF IV loans in excess of the outstanding principal of such loans and net of certain costs, according to the companies.