REA bids for Mortgage Choice
REA Group is seeking to acquire Mortgage Choice for $244 million.
The broker, which amongst other things finds loans for cars, is subscribed to by about 500 providers.
There are also 380 franchises and 30 lending partners.
In the 12 months to December, an REA statement added, Mortgage Choice settled $11 billion in borrowings.
Its loan book is worth c$54b.
1H21 net profit after tax was $4.1m.
The media group said the deal would build on the acquisition of a smaller similar company, Smartline, between 2017-2019.
Mortgage Choice chairperson, Vicki Allen added “joining the REA network creates a significant opportunity to leverage its deep digital capabilities and expertise, combined with access to a large and engaged consumer audience”.
The board has unanimously recommended the deal to shareholders (story continues below).
Banks vs mortgage brokers
It has been reported that just over 50 per cent of Australians who take out a home loan use a broker – however not all lenders subscribe to them.
Some borrowers don’t offer all of their products, via them.
Critics also point to a possible lack of transparency – specifically, that agents are paid by the lender and can be more susceptible to spivs.
In practice, major banks often provide better deals to clients than it promotes.
REA will fund the Mortgage Choice acquisition using a syndicated debt facility.
It has appointed Goldman Sachs (as financial adviser) and King & Wood Mallesons (legal adviser) for the transaction.
