Mortgage software provider Smoove has been acquired by Digcom UK Holdings, an indirect subsidiary of Australian property platform PEXA Group, in a deal worth £30.8m.

The terms of the arrangement mean Smoove shareholders will be entitled to receive 54p in cash for each share they hold in the company’s capital.

Smoove, which is listed on Alternative Investment Market of the London Stock Exchange, provides technology-based solutions to the UK’s conveyancing market.

Its primary product is eConveyancer, a panel management service which brings together conveyancers and introducers, including mortgage brokers and lenders, and their customers. Smoove has a connection with over 75 conveyancer firms on the eConveyancer platform and an estimated 2,100 conveyancing firms via lender panels.

The deal values Smoove at AUD $58.6m (£30.8m) on a fully diluted basis, or AUD $41.5m (£20.8m) net of acquired cash of £9.2m as of 30 September, and £0.8m received from the proceeds of exercised options.

PEXA revealed the acquisition will be funded through cash it currently holds, which has been drawn down from its existing facility and a newly established facility, and which can be used for general commercial requirement. This has a limit of $40m AUD (£20.9m).

Smoove chairman, Martin Rowland, said: “Both Smoove and PEXA share a common objective, to simplify and improve the home moving experience for consumers. The acquisition of Smoove by Digcom accelerates execution of the plans for both Smoove and PEXA.

“Whilst the board of Smoove continues to believe in Smoove’s strategy and prospects as an independent company, they believe that the combination may provide Smoove with additional scale and help accelerate its plans to materially change the home moving experience.”

PEXA is a digital property exchange platform and property insights solutions business, headquartered in Melbourne, Australia. Since it entered the UK market, the group has launched its first remortgage product, successfully brought two lenders onto its platform, and acquired and progressed integration of specialist remortgage conveyancer, Optima Legal.

The group believes there is a significant opportunity for Smoove’s existing customers to benefit from PEXA’s digital property settlements platform and wider service offering, leveraging PEXA’s experience in the Australian market.

PEXA CEO and managing director, Glenn King, commented: “The acquisition is aligned with PEXA’s strategy of enhancing and leveraging our property exchange know-how to deliver growth from different markets, including in other Torrens title jurisdictions, starting with the UK.

“The acquisition and integration of Smoove into the PEXA UK business will further help us address the many detriments suffered by consumers due to the UK's fragmented, inefficient conveyancing processes. The acquisition will allow us to build additional scale and depth in the UK market, enabling the PEXA product suite to reach more customers, whilst streamlining and improving the UK property transaction experience.”

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