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Mortgage servicing business set to be acquired for £15.5m


Arrow Global Group PLC has announced the proposed acquisition of Mars Capital’s UK and Irish mortgage servicing businesses for £15.5m.

Arrow Global has agreed terms to acquire Mars Acquisition Limited – the holding company of the Mars Capital UK and Ireland secured servicing platforms – with the transaction subject to regulatory approval by the FCA and fulfilment of the Central Bank of Ireland notification obligations, which is expected to complete in late 2017.

The acquisition aims to boost Arrow Global’s asset management capabilities, as well as providing a strategic entry into Ireland - a new market for the group - which offers significant debt purchasing and servicing potential.

The acquisition is set to be funded in cash from existing group resources, with £9m paid on closing and the remainder paid on the fourth anniversary of completion. 

Mars Capital provides servicing for mortgages covering first and second charge residential, buy-to-let and SME commercial mortgages as well as full loan lifecycle servicing, from loan origination support to late state recoveries and real estate sales.

For the year ended March 2017, Mars Capital generated revenue of £9m and profit before tax of £2m.

"We are delighted to be joining Arrow Global,” said Kevin Blake, managing director of Mars Capital.

“With the support of Mars Capital's founders, Matt Gilmour and Alex Forrester, we have built a strong, focused business in the UK and Ireland which will sit well in Arrow Global's asset management capability set.

“We believe this provides the enlarged group with significant opportunity. 

“Like Arrow Global, we are a customer-centric business and place great emphasis on service levels and customer outcomes.”

Arrow Global has also entered into a strategic partnership with Oaktree Capital Management L.P, a leading global asset manager with around $100bn under management. 

The partnership will ensure that Oaktree’s existing UK and Irish residential mortgages assets continue to be serviced on Mars Capital’s servicing platform for an agreed time.

"We are delighted to announce the proposed acquisition of Mars Capital's UK and Irish mortgage servicing businesses as well as our strategic partnership with Oaktree,” said Lee Rochford, group CEO of Arrow Global.

“These agreements expand our European footprint, augment our capital-light asset management capabilities, provide further impetus to our profitable growth trajectory and are completely aligned with our strategic direction.”

Chris Boehringer of Oaktree Capital Management added: "We recognise Arrow Global as one of the leaders in Europe in the secured and unsecured investment and servicing space and their breadth of expertise and servicing scale give us a partner who can work alongside us in the UK and Ireland as we seek to take advantage of future investment opportunities."

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