Having spent most of last year receiving competing takeover bids from international suitors, Link Administration Holdings (ASX: LNK) has today announced the divestment of its banking and credit management business BCMGlobal for up to €30 million (AUD$48 million).
Under the deal, Ireland’s LC Financial Holdings (LCFH) will acquire the business for cash consideration, with sale proceeds to be used to pay down debt, though Link notes its ‘liquidity position remains strong’.
However, the sale of BCMGlobal to LCFH is worth significantly less than that offered for it by The Carlyle Group in 2021, which previously submitted a proposal to buy the banking and credit management business for $86.5 million.
Link Group will receive €20 million cash consideration at completion - expected in the second half of the 2023 calendar year - plus deferred cash consideration of €5 million payable within 12 months of completion and a cash earn out of €5 million subject to the divested business meeting certain financial targets by the second anniversary of the sale.
Link CEO and managing director Vivek Bhatia thanked the efforts of BCMGlobal CEO Antionette Dunne for getting the deal with LCFH over the line.
“As part of our simplification strategy, we have today entered into a binding agreement to sell the BCM business,” Bhatia said.
“I would like to thank Antoinette Dunne and her team for all their work in finalising this transaction over the past few weeks. Antoinette and her leadership team will now commence working with LCFH on a seamless integration planning process.
“In the meantime, we continue to remain focused on our clients and delivering service excellence to them.”
LCFH CEO Paul Burdell said BCMGlobal was a good fit for the Irish business which counts Link Financial, LCM Partners, LDMS and KLS as subsidiaries.
“We identified the BCM business and team as being both highly regarded in its sector and complementary to our existing group of companies under LCFH,” Burdell sad.
“We have the desire, skill and determination to help the BCM leadership team to create a best in class, global mortgage and loan servicer.
“BCM has an excellent roster of banking and investor clients in Ireland, UK, Italy and the Netherlands, and we are confident that they will continue to provide an outstanding service.”
The sale of BCMGlobal comes three months after Canada’s Dye & Durham had a $2.5 billion takeover offer for the entirety of LNK dismissed by the courts following a year of negotiations.
Shares in LNK are up 0.99 per cent to $2.04 per share at 11.57am AEDT.
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