LSL Property Services has agreed a deal worth up to £12.9m to acquire Tenet Mortgage Network.
The cash deal, which remains subject to regulatory approval, will see LSL acquire the entire issued share capital of TenetLime from Tenet Limited, a subsidiary of the Tenet Group.
TenetLime operates a network providing services to 231 mortgage and protection advisers, operating within 133 appointed representative (AR) firms. Its advisers arranged approximately £3.9bn worth of mortgages in 2022.
The deal will also see TenetLime recruit 47 mortgage and protection advisers operating within 24 AR firms, that are currently members of TenetConnect and TenetConnect Services. They are expected to transfer to TenetLime prior to completion of the transaction.
Following a short period of transition, TenetLime members will be integrated fully in the operations of LSL’s PRIMIS Mortgage Network.
LSL group CEO, David Stewart, said: “I'm delighted we have been able to complete this transaction and I look forward to welcoming TenetLime’s advisers to our PRIMIS Network. The increase in membership will help us to further invest in our service offering to member firms as well as delivering scale economics to support further growth.”
TenetLime reported profit before tax of £0.9m for the year ending 30 September 2021, at which date it had gross assets of £10.1m.
LSL has confirmed that the acquisition is being financed from its existing cash resources and as of 30 June 2023, the group had a net cash balance of £36.0m.
The consideration payable is expected to be worth up to £12.9m consisting of an initial payment of up to £5.6m, calculated by reference to the number of AR firms at completion and the turnover of these firms in 2022, and then a further payment of up to £4.5m, calculated by reference to the number of AR firms a year after completion.
It also involves an expected payment of £2.8m for assets which form part of TenetLime’s regulatory capital.
Stewart added: “The acquisition also underpins our leading position in the mortgage and protection network market and is fully aligned with our group strategy to develop our financial services network business.”
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