MAB’s market capitalisation was £698.7m today.
The valuation of Primis came as merger and acquisition activity is heating up in mortgage broking, which is seen as a fragmented market ripe for consolidation.
Trussle was acquired by US lender Better this month, while Foxtons is “reviewing strategic options” for its broking business Alexander Hall.
The research was produced by Zeus Capital, which was appointed as joint broker by Primis’s parent company LSL Property Services in November 2020.
Its note ranked Mortgage Advice Bureau (MAB) as a “smaller peer” compared to Primis.
The possible valuation range was based on size, with Primis having 2,681 advisers compared to MAB’s 1,694.
As well, LSL’s mortgage completions reached £32.6bn in the year to 31 December 2020. MAB’s completions were £17.6bn that year.
The valuation comes after a new strategy was brought into play by David Stewart, who joined LSL as group chief executive on 1 May 2020.
Stewart, who was formerly chief executive at Coventry Building Society from 2006 to 2014, has set a target for the financial services segment of LSL to become the group’s largest profit contributor by 2023.
It contributed 30 per cent to the group’s underlying operating profit in 2020. Surveying contributed 40 per cent, and estate agency services 30 per cent.
On 21 April, LSL announced a joint venture with investors Pollen Street Capital, with funds of £200m to create Pivotal Growth, a vehicle “to buy and build a major UK mortgage broking business”.
Potentially, this could provide a route for owners of firms within the Primis network who may be looking to exit.
