Yellow Brick Road (YBR) has announced it has agreed to acquire South Australian-based lender Loan Avenue, which the company says will ease its reliance on Sydney and Melbourne’s mortgage markets.
In a statement to shareholders, YBR said Loan Avenue will provide the group with a strong distribution footprint in South Australia, diversifying its loan book geographically and diluting reliance on the mortgage markets of Sydney and Melbourne.
YBR executive chairman Mark Bouris said the acquisition continues the mortgage and wealth group’s drive for scale.
“Loan Avenue is a respected B2B brand and has been in operation for 10 years with a significant footprint made up of more than 100 brokers in South Australia and Victoria,” he said.
“This acquisition allows us to quickly build more scale in South Australia, diversify and deepen our distribution network and funding relationships and increase our management capability.
“Loan Avenue brings us some other talented product managers and credit experts with stronger delegated lending authorities, boosting our credit capacity.
“Importantly, this acquisition strengthens our relationship with existing funders and gives us access to an additional funder.”
Loan Avenue’s founders and vendors, Paul and Michelle Collins, have agreed to stay on following the acquisition to assist in maintaining and driving existing aggregator and broker relationships as well as supporting integration with YBR.
“We are delighted to join such a fast-growing and diversified group as YBR,” Mr Collins said.
“Our focus will be to enhance our broker relationships and drive further product initiatives with YBR, whilst maintaining the high service levels for which we are renowned.”
According to YBR’s shareholder statement, the deal will cost up to $4.1 million in cash and shares. The acquisition is expected to be completed on 31 May 2016.
[Related: YBR announces another acquisition]