Iress (IRE: ASX) today announces the completion of the sale of its UK Mortgage Sales & Originations (“Mortgage”) business to Bain Capital Tech Opportunities LP (“Bain Capital”).
As announced on March 15, 2024, Bain acquired the UK mortgage business for a total cash purchase price of £85 million (A$167 million), before costs.
Iress’s mortgage business provides mortgage sales and lending software (MSO) and related advisory services to banks and building societies in the UK. Iress acquired the mortgage business over 10 years ago and in that time has grown to become a leading provider of mortgage origination software in the UK.
Marcus Price, CEO of Iress Group, said: “This is the fourth and largest disposal we have successfully completed as part of our transformation program. The net proceeds from all disposals were used to pay down debt, with our debt-to-leverage ratio significantly improving – paving the way for a return to sustainable 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, preparing Iress for future growth.”
Harry Mitchell, Group Executive – Wealth & UK at Iress, said: “The completion of the sale was dependent on the transfer of existing MSO customer contracts to the new owners and we are pleased to have secured the full support of all mortgage customers. “We are confident that this is a great outcome not only for Iress, but also for our customers and employees, as Bain Capital is fully committed to reinvesting in the technology and capabilities that power MSO. Iress’s UK operations are now more focused on its core competencies and we remain committed to driving excellence for our customers in the UK.”
Net proceeds from the sale are expected to be approximately £75 million (AUD147 million1). Iress will provide support services on a cost recovery basis for a period of up to 12 months following the transaction to ensure a smooth transition.
The transaction follows divestitures of the MFA, Platform and Pulse businesses and is part of Iress’ strategy to simplify its operations and divest non-core businesses to pay down debt. Iress’ target leverage range of 1.0 to 1.5x is expected to be achieved by the end of 2024.
The publication of this announcement was approved by Iress CEO and Managing Director Marcus Price.
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