UK private real estate investor Patron Capital has agreed terms to sell its entire prime second-charge mortgage lending business, Optimum Credit, to mortgage lender Pepper Money.
The sale, which is subject to regulatory approval, includes the business’ loan book of more than £450 mln (€515 mln).
Optimum Credit, based in Cardiff, was established by a senior management team led by Sam Marshall, and backed by Patron Capital. The company wrote its first loan in 2014, offering a range of variable, fixed and discounted second-charge mortgages to homeowners in England, Wales and Scotland.
Last summer, the business completed the first public securitisation of second charge mortgages by a UK mortgage lender since the 2008 financial crisis.
Keith Breslauer, managing director of Patron Capital, commented: 'Having identified the opening for a non-bank second-charge mortgage lender and backed Optimum Credit’s experienced management team to set up the business around four years ago, the company has flourished and has been an exceptionally successful investment.'
Over the past few years Optimum Credit has grown into a market leader in the non-bank mortgage space, with more than 25% market share, he noted.
Pepper Money announced earlier this month that it was seeking a banking licence and that it would be considering targeted acquisitions to complement its organic growth plans for the business.
'We are delighted to have been able to agree the purchase of Optimum Credit, subject to receipt of regulatory approval,' said Laurence Morey, Chief Executive Officer of Pepper Money.
Sam Marshall, Chief Executive Officer at Optimum Credit, added: 'This acquisition will give Optimum Credit access to a wider range of resources and shared expertise that will enhance our business and enable our continued growth.'
Houlihan Lokey acted as the exclusive financial adviser to Patron Capital.
