Non-banks announce merger

Two non-bank lenders have today entered into a scheme implementation agreement to create one of Australia’s largest non-bank lenders.

In a trading update today, Homeloans announced that it has entered into a scheme implementation agreement with RESIMAC Limited, under which Homeloans will merge with RESIMAC through the issue of new Homeloans shares to RESIMAC shareholders and the acquisition by Homeloans of all of the shares in RESIMAC.

“The Transaction creates a leading non-bank lending and multi-channel distribution business in Australia and New Zealand with a combined loan portfolio in excess of $13 billion and combined new annual originations exceeding $3 billion in the 12 months to June 30, 2016,” Homeloans said in a trading update.

“Through the addition of a combined strong, and internationally respected, internal securitisation capability with a 20-year program, and expanded retail channel and third-party channel distribution model, the Transaction will result in a vertically integrated business model for the merged group,” it said.

Homeloans chairman, Robert Scott, said entering into binding documentation in relation to the transaction represents a significant step forward in the realisation of Homeloans’ growth strategy and in the board’s opinion delivers the best solution for all stakeholders.

“Homeloans and RESIMAC have highly complementary businesses and strategies; Homeloans has a strong brand in the Australian mortgage industry and a national distribution network, while RESIMAC has well established securitisation and product development capabilities,” he said.

It is expected that upon completion of the transaction, existing RESIMAC shareholders will hold 72.5 per cenr of the merged group and existing Homeloans shareholders will hold 27.5 per cent.

RESIMAC chief Warren McLeland said he was excited about the opportunities that the union would bring.

“We are delighted to be merging with Homeloans and the transaction presents a compelling value proposition for shareholders through combining RESIMAC’s funding capabilities with Homeloans distribution expertise, as well as providing synergies through the integration of the businesses’ operations,” Mr McLeland said.

McLeland is to be appointed as managing director of the merged group, with current Homeloans CEO Scott McWilliam to be appointed joint deputy managing director along with Mary Ploughman, RESIMAC’s executive director of securitisation.

Under the transaction, RESIMAC shareholders will receive all scrip consideration, through the issue of new ordinary Homeloans shares.

Subject to shareholder approval and assuming court approval, the scheme implementation will take place in October 2016.

[Related: Firstmac to be sold]

 

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