Property group sells two businesses to buy-and-build mortgage broker
Property group LSL has sold two more businesses to its own joint venture, Pivotal Growth, as it continues to build up the fast-growing mortgage broker.
Embrace Financial Services and First2Protect will become part of Pivotal Growth in deals that could be worth £18m.
It comes less than three months after LSL also sold Group First and RSC New Homes to Pivotal Growth for up to £20m.
LSL’s group chief executive David Stewart said: “This marks another significant step in our work to simplify the group, whilst we focus on taking advantage of the exciting opportunities available to us across each of our divisions, including our financial services network business.”
LSL’s strategy to is focus financial services activity on business-to-business services, through its PRIMIS network through which it distributes around 10% of all new mortgages in the UK.
Direct-to-consumer business Pivotal Growth was created in 2021 and backed by £200m from private equity partner Pollen Street Capital.
It first acquired Lifetime Finance Group in Glasgow, followed by The Buy To Let Broker in Southport, Grange Mortgage and Protection Services in Northampton, and The Loan Partnership.
LSL, which holds a 47.8% stake in Pivotal Growth, said the consumer-facing business “is better placed to increase the value of Embrace and First2Protect”.
In a statement to the stock market, it said: “The acquisition of Embrace and First2Protect will significantly increase the number of advisers Pivotal Growth employs, expand its distribution into the estate agency market and provide additional capability in the general insurance market.”
Pivotal Growth will pay seven times the EBITDA of Embrace in calendar year 2024, subject to agreed working capital adjustments, capped at a maximum of £10m.
The consideration payable for First2Protect is £7.8m, which is seven times adjusted 2022 EBITDA.
