UK challenger Starling bank acquires Fleet mortgages as its first corporate acquisition.
The deal is for £50 million ($64.1 million) in a mix of cash and stock.
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Fleet hasn’t had a credit loss in its seven-year history, and has originated a cumulative £2.3 billion ($2.95 billion) worth of mortgages.
The company conducts its lending activity exclusively through mortgage adviser distribution channels.
Starling has managed to grow revenues to £97.6 million from £14 million in the previous period.
Anne Boden says the company aimed to IPO in late 2022 or early 2023, but said that “the important thing is we’re going to do it in our time. We’re not going to be forced to do it because it’s fashionable at the moment.”
Fleet Mortgages CEO Bob Young said the acquisition would allow the company to focus on its “significant and ambitious lending and growth targets” and “provides us with a very strong lending base from which to work and to deliver for our staff, our adviser partners and our landlord customers.”
Before the deal, Fleet financed its operations with loans from UK banks.
The deal includes a part where Starling will become the sole funder of Fleet’s buy-to-let mortgages to landlords and Fleet will continue to operate under its own brand.