This article is from the Australian Property Journal archive
ASX-listed digital property exchange platform PEXA is acquiring UK-based conveyancing technology provider, Smoove plc.
In acquiring Smoove, PEXA will continue to work towards expanding its technology into the UK by deepening its presence in the market.
Smoove, is a provider of technology-based solutions to the UK conveyancing market and is listed on the Alternative Investment Market of the London Stock Exchange. Its primary product is an e-conveyencer.
“The acquisition is aligned with PEXA Group’s strategy of enhancing and leveraging our property exchange know-how to deliver growth from different markets, including in other Torrens title jurisdictions, starting with the UK,” said Glenn King, CEO and managing director at PEXA Group.
“Since entering the UK market, the PEXA Group has launched its first re-mortgage product, successfully brought two lenders onto the PEXA platform and acquired and progressed integration of specialist re-mortgage conveyancer, Optima Legal.
PEXA and Smoove reached an agreement on the proposed acquisition, with the board of directors of Smoove intending to unanimously recommend that shareholders vote in favour of a scheme of arrangement, wherein shareholders will be entitled to receive 54 pence in cash (consideration) for each share in capital they hold.
“The acquisition and integration of Smoove into the PEXA UK business will further help us address the many detriments suffered by consumers due to the UK’s fragmented, inefficient conveyancing processes,” added King.
“The acquisition will allow us to build additional scale and depth in the UK market, enabling the PEXA product suite to reach more customers, whilst streamlining and improving the UK property transaction experience.”
The acquisition of Smoove will enable PEXA to provide access to over 75 conveyancer firms through Smoove’s conveyancer platform, in addition to approximately 2,100 firms through the work that Smoove does in arranging panels for lenders across the UK market.
As well as re-mortgage flows equivalent to 7% of the UK market and sale and purchase flows across the Smoove platform which are equivalent to 3% of the UK’s sales and purchase market which are intermediated by the Smoove platform.
With the deal also providing opportunities to cross-sell the PEXA platform to panel firms of Smoove and important relationships with key Smoove customers such as Lloyds Banking Group.
The consideration values Smoove at AUD$58.6 million, on a fully diluted basis, or AUD $41.5 million net of acquired cash of £9.2 million as at 30 September 2023 and £0.8 million received from the proceeds of exercised options.
The acquisition will be funded through cash currently held by PEXA, which has been drawn down from its existing facility and a newly established facility.
Back in August, PEXA posted a full-year loss of $21.8 million due to challenging market conditions over FY23 stifling its earnings.
