Iress announces divestment of UK Mortgages business

Iress Limited (ASX: $IRE) has entered into a binding agreement to divest its UK Mortgage Sales & Originations business to Bain Capital Tech Opportunities LP for a total cash consideration of £85m ($A164.3m). This divestment is a key milestone in Iress' transformation strategy to divest non-core assets and strengthen its balance sheet.

Executive Commentary on Divestment

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. We saw strong interest in our Mortgages business through the sale process and we're delighted that we are announcing this transaction ahead of schedule. 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. We are delighted to have found an acquirer in Bain Capital with the expertise and capital to appropriately invest in the growth of MSO for the benefit of its customers and employees. The proceeds of the transaction will make a material difference to Iress' net debt position, strengthening our balance sheet and providing greater ability to double-down and invest for growth in our core businesses of Wealth, Trading & Market Data and Superannuation.

Summary of Iress' Divestment of UK Mortgages Business

Iress (ASX: $IRE) has announced the divestment of its UK Mortgage Sales & Originations business to Bain Capital Tech Opportunities LP for a total cash consideration of £85m. This divestment is a significant step in Iress' transformation strategy to divest non-core assets and strengthen its balance sheet. The net proceeds from the sale are expected to be approximately £70-73m, which will be used to retire debt, significantly deleveraging Iress. The transaction is anticipated to be completed by the middle of the year, subject to the novation of the existing MSO client contracts to the new entity as well as Competition and Markets Authority approval. The sale marks the third and largest divestment executed under Iress' transformation strategy, demonstrating significant progress. The company aims to achieve the target leverage range of 1.0-1.5x by the end of 2024, further solidifying its financial position.