Skipton Building Society sells mortgage servicing subsidiary
SKIPTON Building Society has sold its mortgage servicing subsidiary, Homeloan Management Limited (HML), for £47.5m.
The mutual, one of Yorkshire’s three largest building societies, says the deal signals positive opportunities for both businesses.
Computershare Limited, the UK subsidiary of the Australian Securities Exchange listed group, has agreed to buy HML as it looks to extend its mortgage servicing business in the UK.
Skipton will receive an initial consideration of £47.5m, plus an adjustment for surplus working capital, together with potential additional payments based on revenue growth in 2015 and 2016. The initial consideration will generate a profit of £26m to be recognised in Skipton’s results in the second half of this year. The sale is subject to FCA approval.
The announcement follows a 26-year period in which Skipton established and grew HML to become one of Europe’s leading third party mortgage administrators. Computershare, which has UK offices in Halifax, Bristol, Edinburgh and London, is already an established player in the USA mortgage servicing market, having acquired Specialized Loan Servicing in 2011. Founded in 1978 Computershare employs more than 14,000 people across the globe, providing services in over 20 countries to more than 16,000 clients. It provides corporate trust, stock transfer and employee share plan services.
Skipton, which employs nearly 5,000 staff and celebrated its 160th anniversary last year, said that for HML, the deal marks the start of a new era which will enable it to better capitalise on the market opportunities which are developing.
Skipton group chief executive David Cutter said: “HML has been a major success story for Skipton of which we are very proud. However, we anticipate major growth opportunities arising in the mortgage outsourcing market which are best seized by the investment from a large multinational company. We believe Computershare will be an ideal new owner for HML and I wish all staff at HML the very best for the future.”
The building society said the deal enables Skipton to further focus on growing its core business of mortgages and savings, and investing in the products and services provided to its members.
HML’s head office will remain in Skipton and continue to be led by chief executive officer Andrew Jones.
Jones said: “I am delighted that HML and Computershare will be working together, and Computershare becoming our parent company is excellent news for the business and those who work at HML.
“Computershare is committed to investing in and growing HML, allowing us to continue to be the leading third-party mortgage administration company in the UK and Ireland. With the desire to grow the business and develop the specialist expertise that HML has, it’s clear to me that culturally we are much aligned with Computershare.
“HML has had 25 years of successfully delivering value to clients, customers, our people and Skipton Building Society, and this deal will secure the future of the company for many more years to come.”
Skipton was advised by Deloitte and Addleshaw Goddard’s corporate-led team including Neil Woolhouse and Mark Hallam, Matthew Davies, Chris Dereix, with support from Ian Sampson, also acted for Skipton.
In 2013, HML had revenues of £59.2m and Skipton posted an increase in pre-tax profits by £67.1m to £102.5m during the year.
