Challenger buys Plan

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Australia-based Challenger Financial Services Group is to buy the 85% of mortgage aggregator Plan in one of three similar purchases.

Monday, September 17th 2007, 5:07AM

by Jenny Ruth

Challenger is also buying Choice Aggregation Services, a mortgage broker and aggregator, for A$163 million ($193.2 million). It says that the amount it will pay for Plan, Australia's largest mortgage aggregator which also operates in New Zealand, will be based on the business's performance "and will reflect similar financial metrics to the Choice acquisition.

Challenger is also paying $A9.4 million for a 19% stake in FAST, a Perth-based Australian aggregator.

Challenger, which has $A23 billion in mortgages under management at June 30, is listed on the Australian Stock Exchange and is one of Australia's largest non-bank mortgage lenders.

"In 2005, we identified the rapidly growing mortgage aggregation platform sector as a logical extension to our existing mortgage management business," says chief executive Mike Tilley.

"Participating in this segment of the market provides us an attractive additional source of ongoing fee income," he says.

The initial 15% stake in Plan, acquired in December 2005, "provided us with significant understanding of the aggregation market and a sound basis for these new acquisitions."

Plan was founded in 1999 to provide aggregation and other support services to mortgage brokers. It has a loan book of about $A30 billion and about 2,000 mortgage broker members.

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