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MAB buys remaining 20% stake in First Mortgage Direct

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  • 29/05/2024
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MAB buys remaining 20% stake in First Mortgage Direct
Mortgage Advice Bureau (MAB) has confirmed that it will buy the remaining 20% stake of First Mortgage Direct for a consideration of £9.35m.

MAB initially purchased an 80% stake in First Mortgage Direct in 2019 and has decided to exercise its option to acquire the remaining 20% from Ian McGrail, managing director of First Mortgage.

McGrail will stay on as managing director.

The firm said that around a quarter of the consideration would be cash, while the remaining three-quarters would be backed by the issue of new ordinary shares.

Consequently, MAB has issued 804,754 ordinary shares of 0.1p each in the capital of the company. The shares are expected to be listed at 8am on 3 June.

First Mortgage is a fee-free mortgage advice firm that has been running for over 25 years. It was initially launched in Scotland, but has expanded nationwide.

First Mortgage made a profit before tax of £5.4m in the year ending on 31 December 2023 and has net assets of £9.3m.

MAB said that it expected the transaction to be “earnings-enhancing”.

Ben Thompson (pictured), deputy CEO, said: “Acquiring an 80% shareholding in First Mortgage in 2019 was strategically important to MAB at the time, enabling us to grow our expertise in specific market specialisms such as new build, and accelerate our overall market share as a group.

“Despite the various challenges we all faced together over the last five years, the business has grown substantially in size and in profitability and has become even more important to MAB. We are therefore really pleased to have now acquired the final 20% shareholding from Ian McGrail.

“Importantly, we are delighted that Ian has decided to commit to stay on as managing director and take First Mortgage further over the coming years, having done such an excellent job of the last five, and indeed the years prior to that.”

In its latest results, MAB’s gross mortgage completions came to £25.1bn, an 8% fall on the prior year.

The firm said that it expected to hire more appointed representative (AR) advisers and firms to its business in the next few months.

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