Mortgage Advice Bureau to buy 80% of First Mortgage for £16.5m

First Mortgage has over 90 employed mortgage and protection advisers and 14 ‘mortgage shops’. It has a significant presence in Scotland and a smaller reach south of the border.

Mortgage Advice Bureau to buy 80% of First Mortgage for £16.5m

Mortgage Advice Bureau will acquire 80% of Edinburgh-based broker First Mortgage for £16.5m on 1 July.

First Mortgage has over 90 employed mortgage and protection advisers and 14 ‘mortgage shops’. It has a significant presence in Scotland and a smaller reach south of the border, while half of its new customers come from referrals from other customers.

MAB said the acquisition presents it with significant growth opportunities by adding more advisers to the group, while First Mortgage's focus on the new homes market in Scotland makes it particularly attractive.

Mortgage Advice Bureau pledged to leverage First Mortgage’s expertise in its telephony strategy with new technology.

The remaining 20% of First Mortgage will be retained by managing director Ian McGrail (pictured), though his father and director Robert McGrail will divest in full and leave the business.

Ben Thompson, managing director of First Mortgage, said: "This acquisition is central and complementary to our strategic objective to grow our market share of new mortgage lending.

“First Mortgage is a highly reputable, forward thinking business of significant scale with a clear strategy to deliver further strong year on year growth.

“This enables us to pursue at pace our aim to accelerate group growth through excelling in areas of specialisation, and in particular, building on our omni-channel choice for customers.

“This approach best positions MAB to benefit in an evolving intermediary sector. MAB's new technology developments will further strengthen our capability and ambition in this regard

“I am delighted that Ian has chosen to work with us, to help us both to really accelerate our respective growth plans and am excited at the prospect of making this highly successful and enjoyable for both teams."

MAB will have an optional agreement with Ian McGrail to acquire the remaining 20% between 2024 and 2030, at a valuation of eight times the previous year’s audited profit before tax, for a minimum of £4m and a maximum of £10m.

Mortgage Advice Bureau will fund the acquisition using a combination of its own money and a £12m revolving credit facility with NatWest.