Following the sale of its platform business to Praemium, Iress has made a second disposal as it moves to streamline operations and strengthen its balance sheet.
In an ASX announcement on 15 March, Iress said it is selling its UK mortgages business to Bain Capital Tech Opportunities LP for £85 million ($164.3 million).
This is a software-focused fund and Bain said it intends to combine the mortgages business with another UK mortgage software provider – Finova – to establish a new entity.
This divestment, the third and largest under Iress’ transformation strategy, signified a significant step forward for the company.
Iress acquired the UK mortgages business over 10 years ago, during which time it has become a leading provider of mortgage origination software in the UK.
Iress group chief executive Marcus Price said: “Mortgages, sales and origination (MSO) is recognised as the most advanced end-to-end software of its kind and has changed mortgage lending in the UK with its scalable, customer-focused value proposition.
“Our decision last year to focus on our core strengths means now is the right time for the Mortgages business to build on the strength of its product platform under new ownership.
“It is perhaps the most significant milestone achieved to date in Iress’ transformation, which sets out our plans to simplify our structure, create a more transparent and sustainable business and find new owners for businesses which are no longer strategically aligned to Iress’ objectives.”
The proceeds of the transaction are expected to make a “material difference” to Iress’ net debt position, strengthening its balance sheet and providing greater ability to double down and invest for growth in its core businesses of wealth, trading and market data, and superannuation.
Net proceeds from the sale are expected to be approximately £70–73 million ($135–141 million), with the completion of the sale anticipated by the middle of the year.
The transaction followed the divestments of the managed funds administration (MFA) and OneVue platform businesses, as part of Iress’ strategy of simplifying its operations and divesting non-core businesses to retire debt.
In February, it announced it had sold its OneVue platform business to platform technology business Praemium, boosting Praemium’s funds under administration by $4 billion, expanding its client base, increasing market share and strengthening its position in the Australian market.
