REG - Fintel PLC - Strategic Investments

FintelAnnouncement

26/03/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240326:nRSZ2228Ia&default-theme=true

RNS Number : 2228I  Fintel PLC  26 March 2024

26 March 2024

Fintel plc

("Fintel", the "Company", the "Group" or the "Business")

Strategic Investments to increase Fintel's scale, IP and capabilities

Fintel (AIM: FNTL), a leading provider of fintech and support services to the
UK retail financial services sector, today announces two important strategic
investments:

·    New Distribution agreement with Mortgage Brain together with a
minority investment by Fintel in Mortgage Brain, one of the leading providers
of technology to the mortgage industry

·    Acquisition of 70% of ifaDASH, a reg-tech solution that assists
intermediaries with running an efficient, compliant business

·    Both transactions are in line with Fintel's strategy, which balances
growth across our core activities, organic investment and complementary
M&A, and are financed from Fintel's existing financial resources

·    Both investments increase Fintel's scale, IP and capabilities,
capitalising on favourable market conditions for M&A

 

Mortgage Brain distribution agreement and minority investment

Fintel and Mortgage Brain, a leading technology provider to the mortgage
industry, have today announced a new distribution agreement and an investment
by Fintel of £1.5m (the "Fintel Investment") in return for 5.8% of the
current issued share capital of Mortgage Brain Holdings Limited ("Mortgage
Brain") at the time of the investment. The Fintel Investment for newly issued
shares in Mortgage Brain will allow Mortgage Brain to continue investment in
its technology platform and enhance its service to lenders and intermediaries.

With a history spanning over 35 years, Mortgage Brain has a strong reputation
as one of the leading providers of technology to the mortgage industry. It
serves over 15,000 intermediaries with a suite of software sourcing solutions,
submissions and CRM.

Under the new agreement, Mortgage Brain's CRM, sourcing and submission
software will be made available to Fintel's wide network of advisers via its
Intermediary Services division, helping them to efficiently source and place
the best mortgage products for their clients.

In consideration of the Fintel Investment, the arrangements also include a
separate agreement between Fintel and Mortgage Brain's shareholders that
defines the basis for Fintel to potentially acquire their current issued
shares in Mortgage Brain. If such an acquisition of shares proceeds, the
valuation attributable to the Mortgage Brain shares would be determined at
that time by reference to Mortgage Brain's financial performance and other
factors over the next two financial years.

For the year ended 31 March 2023 Mortgage Brain had revenues of £13.2m and
reported an EBITDA loss of £1.96m.

Acquisition of ifaDASH

Fintel also announced the completion of its acquisition of ifaDASH, a reg-tech
solution that assists intermediaries with running an efficient, compliant
business. The acquisition was made through Fintel IQ, complementing its
existing CRM software.

Through the transaction, Fintel has taken an initial 70% stake in ifaDASH, for
an upfront cash consideration of £0.5m, with up to £1.0m of contingent cash
consideration based on certain revenue and profitability targets being
achieved in the next 12 months.

Fintel also has the option to purchase the remaining 30% equity in the
business over the next two years for an agreed multiple of EBITDA.

The acquisition follows the Group's investment in CRM entrant Plannr, giving
it access to the leading strategic CRM platform for small to medium-sized
intermediaries.

Neil Stevens, Joint CEO of Fintel plc, said:

"Our new distribution agreement with Mortgage Brain will enable our members to
access their leading mortgage sourcing and submission software as part of our
integrated platform.

"Our investment provides a significant cash injection to accelerate Mortgage
Brain's product transformation, enhancing its solutions and providing even
greater efficiency to its customers, including Fintel's extensive membership
base.

"We are also delighted to acquire ifaDASH today, as we seek to continue to
enhance our CRM capabilities. CRM is critical to our wide network of
intermediaries as it improves their efficiency and reduces the regulatory
burden, allowing them to focus on generating better outcomes for their
clients."

 

For further information please contact:

 Fintel plc                                     via MHP Group

 Matt Timmins (Joint Chief Executive Officer)

 Neil Stevens (Joint Chief Executive Officer)

 David Thompson (Chief Financial Officer)
 Zeus (Nominated Adviser and Joint Broker)      +44 (0) 20 3829 5000

 Martin Green

 Dan Bate
 Investec Bank (Joint Broker)                   +44 (0) 20 7597 5970

 Bruce Garrow

 David Anderson

 Harry Hargreaves
 MHP Group (Financial PR)                       +44 (0) 7736 464749

 Reg Hoare                                      Fintel@mhpgroup.com

 Robert Collett-Creedy

Notes to Editors

Fintel is the UK's leading fintech and support services business, combining
the largest provider of intermediary business support, SimplyBiz, and the
leading research, ratings and Fintech business, Defaqto.

Fintel provides technology, compliance and regulatory support to thousands of
intermediary businesses, data and targeted distribution services to hundreds
of product providers and empowers millions of consumers to make better
informed financial decisions. We serve our customers through three core
divisions:

The Intermediary Services division provides technology, compliance, and
regulatory support to thousands of intermediary businesses through a
comprehensive membership model. Members include directly authorised IFAs,
Wealth Managers and Mortgage Brokers.

The Distribution Channels division delivers market Insight and analysis and
targeted distribution strategies to financial institutions and product
providers. Clients include major Life and Pension companies, Investment
Houses, Banks, and Building Societies.

The Fintech and Research division (Defaqto) provides market leading software,
financial information and product research to product providers and
intermediaries. Defaqto also provides product ratings (Star Ratings) on
thousands of financial products. Financial products are expertly reviewed by
the Defaqto research team and are compared and rated based on their underlying
features and benefits. Defaqto ratings help consumers compare and buy
financial products with confidence.

For more information about Fintel, please visit the website:
www.wearefintel.com (http://www.wearefintel.com)

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCQKPBBOBKDNNB