Iress (IRE: ASX) today announces it has completed the sale of its UK Mortgage Sales & Originations (“Mortgages”) business to Bain Capital Tech Opportunities LP (“Bain Capital”).
As announced on 15 March 2024, Bain has purchased the UK Mortgages business for a total cash consideration of £85m ($A167m1) before costs.
Iress’ Mortgages business provides mortgage sales and origination software (MSO) and associated consulting services to banks and building societies in the UK. Iress acquired the Mortgages business over 10 years ago, during which time it has become a leading provider of mortgage origination software in the UK.
Iress’ Group CEO, Marcus Price, said: “This is the fourth and largest divestment we have successfully executed under our transformation program. The net proceeds of all divestments have been used to retire debt, with our debt to leverage ratio seeing considerable improvement - paving the way for a return to maintainable dividends. As we enter the final months of our transformation program, we can already see a stronger Iress with an improved earnings profile, balance sheet strength and execution discipline priming Iress for future growth.”
Iress’ Group Executive - Wealth & UK, Harry Mitchell, said: “Completion of the sale was contingent on the novation of existing MSO client contracts to the new owners and we’re pleased to have gained the full support of all Mortgages clients. We are confident this is a great result not only for Iress, but also for our clients and people, with Bain Capital fully committed to re-investing in the technology and capabilities that power MSO. Iress’ UK operations now have a streamlined focus on its core competencies, and we remain committed to driving excellence for our clients in the UK.”
Net proceeds from the sale are expected to be approximately £75m ($A147m1). Iress will provide support services for a period of up to 12 months after the transaction on a cost recovery basis to ensure a smooth transition.
The transaction follows the divestments of the MFA, Platform and Pulse businesses, as part of Iress’ strategy of simplifying its operations and divesting non-core businesses to retire debt. It is expected Iress’ target leverage range of 1.0 - 1.5x will be achieved by the end of 2024.
The release of this announcement was authorised by Iress’ CEO & Managing Director, Marcus Price.