Mattioli Woods takes majority stake in White Mortgages

27th Apr 2023 12:20

(Sharecast News) - Wealth and asset management specialist Mattioli Woods announced the acquisition of 50.1% of White Mortgages on Thursday, for consideration of £0.43m.

The AIM-traded company described White Mortgages as an independent mortgage advice provider, which also offers "bespoke" protection advice.

It said it could acquire the remaining 49.9% through a call option agreement, exercisable at any time during the 24 months starting 27 April 2026, for up to £2.63m in cash, depending on the achievement of specified targets in the 12 months before exercise.

Founded in 2011 and based in Lincoln, Mattioli Woods said White Mortgages has a team of nine staff, including four advisers and five administrative employees, all of which would remain with the firm following completion.

In the year ended 31 March, White Mortgages generated revenue of £0.68m, with a profit before tax of £0.35m.

The acquisition was expected to be earnings enhancing in the first full year of ownership.

Total consideration would include an initial cash-free, debt-free basis of £0.425m, subject to adjustment for the value of net assets acquired, and a call option consideration of up to £2.625m in cash if exercised.

The payment of the initial cash consideration, deal costs, and estimated net asset completion adjustment resulted in a net cash outflow at completion of £0.61m, net of estimated cash received on acquisition.

"Our investment in White Mortgages is an exciting extension to our existing client proposition and is another step forward for Mattioli Woods, as we continue to expand our operations," said group managing director Michael Wright.

"Over the past six months, we have seen significant changes in the economy, none more so than immediately after the government's mini-budget last September and the impact it had on the mortgage market, with a leap in mortgage interest rates, the withdrawal of many mortgage products and a rapid tightening in lenders' underwriting criteria.

"By bringing Steve and his team into the group, we are better positioned to help those clients looking to finance a new property purchase or refinance existing lending."

At 1126 BST, shares in Mattioli Woods were up 1.69% at 600p.

Reporting by Josh White for Sharecast.com.