Australian-based Computershare has agreed to buy third-party mortgage servicing company Homeloan Management Limited (HML) from Skipton Building Society in the United Kingdom.
While the group operates mortgage servicing businesses in the United States, the acquisition is the first mortgage servicing business for Computershare in the United Kingdom, where it operates other non-related businesses.
HML is a third-party mortgage administration business with annual revenues of GBP 59.2 million in calendar year 2013.
The acquisition is expected to close upon receiving approval from the Financial Conduct Authority (FCA), which may take between two and four months, according to yesterday’s ASX announcement.
The upfront consideration is GBP 47.5 million, plus an adjustment for surplus working capital, together with potential additional payments based on revenue growth in 2015 and 2016.
However, the potential contribution to 2014/2015 is not expected to be material to the Computershare group. Anticipated transaction synergies will be delivered progressively over the first two to three years of ownership.
“We are delighted to be acquiring HML and extending our mortgage servicing business into the UK,” Computershare chief executive Stuart Irving said.
“We are excited about both HML’s growth potential and our ability to add value to this business given the alignment with our core competencies,” Mr Irving said.
“Subject to FCA approval, we expect a seamless transition for HML’s employees and clients and we will continue to provide the highest quality of service available in this market,” he said.
HML has 1,250 staff primarily operating out of Skipton, Glasgow and Derry and also has an office in Dublin.
HML has 60 clients and has approximately GBP 37 billion in mortgage assets under administration, which currently represents around 62 per cent of the UK third-party mortgage administration market.
It’s core service is mortgage administration and it provides a variety of services across the entire mortgage lifecycle including credit management and loan analytics.
Australian-based Computershare has a market cap of $7.14 billion and provides services to 16,000 clients across 20 countries.