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ASX-listed asset manager, corporate advisory and lender MA Financial is set to acquire Finsure for around $151.6 million.
MA Financial has entered into binding agreements with BNK Banking Corporation (BNK) to purchase its mortgage aggregator, Finsure, and its subsidiaries, for around $151.6 million in cash.
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The transaction is subject to regulatory approval from APRA, but it is expected to complete during the first quarter of 2022.
John Kolenda, co-founder and chief executive of Finsure, will continue in his role as CEO of the business. MA Financial (MAF) reported the broader Finsure senior executive team is also “committed” to remaining with the company post-transaction.
Mr Kolenda commented MAF’s “strong financial position” will provide the aggregator with growth opportunities and to provide value to its broker network.
“Finsure is uniquely positioned as a scalable, technology-enabled platform with a differentiated service proposition to become one of the most powerful pieces of financial infrastructure in the Australian residential mortgage market,” he said.
“MAF can support Finsure in this journey through its access to capital, credit and lending capabilities and technology expertise.”
BNK chair Don Koch said the deal represented a positive outcome for BNK shareholders, after the group had undertaken a strategic review of its business.
The $151.6 million sale price represented a 66 per cent premium to BNK's market cap, as at 21 September.
“After a detailed assessment, the board believes the sale of Finsure to MAF represents a compelling outcome for all BNK stakeholders, including shareholders, our people and customers,” Mr Koch said.
“Following the sale of Finsure, BNK will be a strongly capitalised digital bank with a clear and focused strategy to leverage recent initiatives to strengthen our competitive position. We will continue to assess options in respect of BNK as part of the ongoing strategic review.”
With the transaction, MA Financial will gain a network of more than 2,000 mortgage brokers, who have access to a panel of around 65 lenders, offering more than 4,800 loan products.
Finsure has a loan book of $60.8 billion worth, with originations having grown by 27.9 per cent in the 12 months to September.
The business is expected to boost MA Financial’s lending business, with the group’s strategy being to develop a scalable, technology-backed lending platform in Australia’s $2 trillion residential mortgaged market.
MA Financial further believes there will be synergies with integrating the Finsure platform, pointing to the potential to use market intelligence and data to drive new product development.
The company also flagged the growing prominence of brokers, noting market share of mortgages written had increased from 50.4 per cent in November 2014 to 66.9 per cent this past November.
“While Finsure has been growing strongly, the opportunity to be part of MAF, a larger and more diversified financial services group, will accelerate Finsure’s ability to grow its presence in the Australian financial services market,” Mr Koch added.
To fund the purchase, MA Financial has indicated it expects to raise around $100 million through an institutional placement, as well as a share purchase plan for retail investors, to raise up to $10 million.
MA Financial entered into a trading halt on Tuesday and is expected to remain in the halt until Thursday, when the outcome of the institutional raise will be declared.
Meanwhile, BNK has said it will give a further announcement on how it will manage the proceeds from the sale.
[Related: New broking group co-operative launches]
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