Yellow Brick Road to buy RESI

Bouris-led group set to buy mortgage lender for $36m as it chases more market share.

Yellow Brick Road Holdings (YBR) is set to acquire privately-owned mortgage manager RESI Mortgage Corporation (Resi) for $36 million as it ramps up its assault on the big four's market share.

The group will pay $28m cash, $5.5m in ordinary shares at a price of 70 cents each, with up to $2.5m being paid one year after the settlement.  

Yellow Brick Road announced it has secured commitments from Macquarie, Prink Platypus and institutional investors for $42.05m to fund the acquisition. The capital raising came in ahead of the $36m required.

Through the issuing of over 60 million shares at a price of 70c, Macquarie and Pink Platypus have paid $12m and institutional investors paid $18.05m.

The deal is subject to YBR shareholder approval, but the lender is eyeing completion of the takeover to occur on August 29.

Yellow Brick Road has also announced its executive chairman, Mark Bouris, has entered into a new five-year consultancy agreement with the company.

The agreement between YBR and Mr Bouris’ company Golden Wealth Holdings was due to expire on June 30, 2015.

The company said Resi is one of the few remaining non-bank lenders of scale, which is not owned by one of the big four and has a solid growth pipeline.

"The complementary skills and relative strengths of the YBR, Vow and Resi brands and businesses will combine to provide Resi franchisees,YBR Branch licensees and Vow brokers with unparalleled opportunities to build revenues and market position as we progress our strategy to be a leader in the 'non-bank' sector," Mr Bouris said.