PEXA Group, a prominent digital property exchange platform and property insights solutions firm listed on the ASX, has disclosed its plan to acquire Smoove PLC, a UK-based conveyancing technology provider. The board of directors at Smoove has expressed unanimous support for the proposed acquisition, recommending Smoove shareholders to vote in favor of the scheme and its related resolutions during the upcoming shareholder meetings. Pending approval, the acquisition is projected to be finalized in the fourth quarter of 2023.
The deal values Smoove at £30.8 million (A$58.6 million) on a fully diluted basis, or £20.8 million (AUD $41.5 million) net of the £9.2 million cash on hand as of September 30, 2023, and £0.8 million from exercised options. PEXA will finance the acquisition using its existing cash reserves, funds drawn from its current facility, and a newly established facility with a limit of $40 million AUD for general commercial needs.
Smoove, a company listed on the Alternative Investment Market of the London Stock Exchange, specializes in technology-based solutions for the UK conveyancing sector. Its primary offering, e-Conveyancer, serves as a panel management service, connecting conveyancers, mortgage brokers, lenders, and customers to create a two-sided conveyancer marketplace that links consumers with quality conveyancers. Smoove has also invested in Smoove Complete, a digital platform for Consultant Conveyancing Lawyers, and SmooveStart, a digital conveyancing solution for estate agents. Additionally, Smoove owns Legal Eye, a provider of legal compliance services.
The acquisition of Smoove will enhance PEXA’s presence in the UK market by providing access to:
- Over 75 conveyancer firms through Smoove’s platform, in addition to around 2,100 firms involved in arranging panels for lenders across the UK.
- Remortgage flows equivalent to 7% of the UK market and sale and purchase flows representing 3% of the UK’s sales and purchase market, facilitated by the Smoove platform.
- Opportunities to cross-sell the PEXA platform to Smoove’s panel firms, offering access to volumes both on and outside of the Smoove platform.
- Valuable relationships with key Smoove customers, including Lloyds Banking Group, a partnership that dates back to 2007
Glenn King, CEO and Managing Director of PEXA Group, shared his thoughts on the proposed acquisition, emphasizing that it aligns with PEXA Group’s strategy to leverage its property exchange expertise to drive growth in various markets, starting with the UK. King also highlighted the progress PEXA has made in the UK market, including the launch of a re-mortgage product and the integration of Optima Legal, a specialist re-mortgage conveyancer. This acquisition aims to address the challenges faced by consumers due to the UK’s fragmented conveyancing processes, providing a more streamlined and efficient property transaction experience.
Subject to fulfilling the necessary conditions, it is anticipated that the acquisition will be completed in the fourth quarter of 2023.