REA Group Ltd has taken a 34 per cent interest in home loan application and e-lodgement solution provider Simpology Pty Ltd (Simpology).
The $15-million consideration, which has been funded from the group’s existing cash reserves, will further entrench the group’s reach in the mortgage space – after having acquired brokerage Smartline and as REA is set to complete on its acquisition of broking franchise Mortgage Choice.
Once complete, REA will take two seats on the board of Simpology, which provides e-lodgement solutions to lending and broker partners across Australia and New Zealand
The group noted that Simpology’s offerings “enable brokers to seamlessly lodge home loan applications directly into lenders’ back-end systems” and would further accelerate the group’s financial services strategy – which is heavily focused on mortgages.
REA Group CEO Owen Wilson added: “REA’s investment in Simpology reinforces our commitment to delivering the best end-to-end mortgage application solutions for consumers, our brokers and their clients, founded on choice and simplicity.
“Our partnership will provide a step-change in the loan selection and digital application experience REA can deliver the 12 million Australians who visit realestate.com.au each month.
“At the same time, Simpology’s suite of digital products will deliver productivity improvements to our brokers through higher-quality loan submissions resulting in less rework, faster loan approval times and streamlined business operations, so they can spend more time with their clients,” Mr Owen concluded.
Simpology's executive chairman, Dave Jacobson, added: “This is a significant strategic milestone for Simpology. We look forward to working with the team at REA as their technology enabler to help bring to life their vision of building Australia’s leading financial services marketplace.”
Similarly, Simpology’s CEO and founder, Kate Gubbins, added: “We are delighted to have an established and respected technology leader like REA invest in our business. Our team at Simpology has been working hard on innovative new solutions, and the investment timing is perfect to bolster our commitment to delivering efficiencies to our partners across the industry.”
REA-Mortgage Choice acquisition nears completion
Last week, the REA acquisition of Mortgage Choice took a step closer to completion after the broking franchise’s shareholders voted in favour of the proposed $244-million deal.
At the scheme meeting, 98.51 per cent of shareholders voted in favour of the acquisition. It needed a majority of 75 per cent to pass.
Only 0.94 per cent voted against.
The scheme of arrangement remains subject to a second court hearing, which will be held on Thursday (17 June 2021), with Mortgage Choice ceasing to trade as MOC on the ASX on 18 June.
If the court approves the scheme, it is expected that the implementation date will be 1 July 2021. On that date, registered Mortgage Choice shareholders will receive a cash consideration of $1.95 per share.
The deal will see Mortgage Choice become a wholly owned subsidiary of REA, alongside franchise broking group Smartline (also owned by REA’s Financial Services business), bringing the total number of brokers under the group to 900.
Mortgage Choice CEO Susan Mitchell commented: “We are very excited to be joining forces with REA. The logic in bringing our businesses together is compelling, creating a business of scale with a strong human and digital offering. It allows us to assist more customers in a more effective way and accelerate opportunities for our network.”
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.