REA Group to take majority stake in mortgage broking franchiser Smartline

REA Group has agreed to buy a majority stake in mortgage broking franchiser Smartline and entered into a partnership for mortgage broking with National Australia Bank.

Realestate.com.au will purchase an 80.3 percent stake in Smartline.

Australian Broker report $67m will be funded from existing cash reserves and the minority shareholders hold a put option to sell the remaining 19.7 percent of shares which can only be exercised after three years, at a price dependent on the financial performance of Smartline. If not exercised, REA will acquire the remaining shares at the end of four years. The transaction is expected to complete in late July 2017.

Realestate.com.au and NAB have also agreed to build a mortgage broking service, with NAB offering its Choice Home Loans brokers to join this new broking solution.

Tracey Fellows, REA group CEO said building a strong presence in the broker market channel is an important part of our financial services strategy.

"These investments allow us to enter a new market with two of the industry’s most trusted and successful mortgage broking operations," she said. 

“Providing a broker solution will complement the digital search and finance experience we are building in partnership with NAB on realestate.com.au. It’s about giving people greater choice when selecting the right home loan for them." 

Chris Acret, Smartline executive director and co-founder said this investment is a great strategic fit for both businesses.

"It’s born from a shared vision to build a market-leading home loan offering, marrying our trusted network of brokers with realestate.com.au’s leading digital capability,” he said.