LSL Property Services has confirmed the sale of two brokerage firms to its private equity-backed venture, Pivotal Growth.

The sale will see new build mortgage and protection brokerage firms, Group First and RSC New Homes, sit under Pivotal Growth, LSL’s joint venture with Pollen Street Capital.

LSL, the parent company of PRIMIS Mortgage Network and TMA Club, stated that the consideration payable will be seven times the combined Group First and RSC “EBITDA” for 2024, subject to agreed working capital adjustments and capped at a maximum of £20m.

The transaction will be payable in cash to LSL during H1 2025, at which time LSL said it would consider the “most effective use of the funds”.

LSL also stated that Pivotal Growth will be “better placed” to increase the value of Group First and RSC, and suggested the acquisitions mark a “significant step” in building critical mass in the new-build brokerage sector.

“Financial Services is at the heart of the group’s growth strategy where we have identified significant opportunities to develop LSL’s position as the leading provider of services to independent mortgage brokers,” commented LSL chief executive, David Stewart.

“These transactions help to simplify the group structure to allow us to focus on maximising these business-to-business opportunities, whilst also reducing exposure to housing market cycles. Pivotal Growth was established in 2021 to exploit the opportunities we had identified in the direct-to-consumer mortgage broking market, and growth in the new build sector is a strategic focus for Pivotal Growth.”

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