McGrath Expands Home Loan Business to OxygenOpens in New Window

ASX ANNOUNCEMENT

McGrath Expands Oxygen Home Loan Business

April 6, 2021 – McGrath Limited (ASX: MEA) today announced that it has entered into a transaction that will improve the scale and optimization of its Oxygen (“Oxygen”) mortgage lending business.

Oxygen raised additional investment capital in the company with a cash injection of $ 2.5 million, providing a controlling 55% stake in Oxygen to a consortium of investors in financial services and technology, Oxygen Investment Corporation Pty Limited led by Doc Klotz, Ben Taylor and Sturt Capital Partners (the “Consortium”). The new funding will be used to increase resources, accelerate digitization and add complementary fintech products to create a broader product offering for Oxygen.

The operation involves:

  • $ 2.5 million cash injection of capital into Oxygen, MEA reducing its stake in Oxygen to a 45% stake through capital injection into Oxygen and cash payment to MEA over three years $ 1.8 million
  • MEA benchmark agreement with Oxygen
  • MEA will retain one of three seats on Oxygen’s board of directors

The transaction aligns with MEA’s strategy because it:

  • Leverage Oxygen’s digital expertise to unlock value for MEA
  • Offers a compelling opportunity to enhance MEA’s existing mortgage brokerage business to complement its property sales and management business
  • Allows MEA to access a wider range of financial products for MEA customers.

The Oxygen mortgage business was started by McGrath in 2003 as a mortgage brokerage service offering to its clients and currently operates with 26 independent brokers and as of December 31, 2020 had a loan portfolio of approximately $ 3.2 billion with annual settlements of approximately $ 700 million.

Mr. Eddie Law, CEO of McGrath, said: “We are delighted to partner with the Consortium, to unlock the significant potential that the merged company will offer on our platform. After the investment, Oxygen will be able to provide its mortgage brokers with an improved client-centric proposition and a streamlined process and improved service proposition that will allow them to take out more loans and allow our sales agents to facilitate the delivery of mortgages to our buyers.

“There is no doubt that technology will play a key role in the future of mortgage brokerage and real estate sales and this transaction, along with the direct investment we are making in technology, sets McGrath up for continued growth. a more streamlined process of writing loans will allow our sales agents to facilitate the delivery of mortgages to buyers, ”he concluded.

-Ends-

Authorized for publication by the McGrath Board of Directors

McGrath Limited (ASX: MEA) ABN 61 608 153 779 55 Pyrmont Street, Pyrmont NSW 2009 www.mcgrath.com.au

For more information, please contact:

Investors

Media

Eddie Law CEO

Howard Herman Chief Financial Officer

Terri Sissian

02 9386 3333

0419 881 414

Tim allerton

0412 715 707

About McGrath:

McGrath Limited (ASX: MEA) has grown into an integrated real estate services company, offering agency sales, property management, residential project marketing, mortgage brokerage and vocational training services. McGrath Estate Agents currently has 102 offices located across Australia’s east coast. For more information, please visit www.mcgrath.com.au.

McGrath Limited (ASX: MEA) ABN 61 608 153 779 55 Pyrmont Street, Pyrmont NSW 2009 www.mcgrath.com.au

Disclaimer

McGrath Ltd. published this content on April 06, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 06 Apr 2021 06:11:00 AM UTC.

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