International banking firm The Investec Group (Investec) has expanded its global realm with the acquisition of specialist UK mortgage lender Kensington Group (Kensington).
Investec, which is based in three principal markets in South Africa, Australia and the UK, will issue 0.7 Investec shares plus a special dividend of 26 pence for each Kensington share.
It will pay out £283 million in total to shareholders. The deal is expected to be finalised in August.
"We are confident that under our ownership, the Kensington franchise will be reinvigorated and that our combined businesses will be well placed to benefit from the growth of the non-standard mortgage market," Investec chief executive Stephen Koseff said.
Investec's strong balance sheet, access to lower cost of funding and capital markets expertise together with Kensington's brand, distribution and product range aims to create a strong business in the non-standard mortgage marketplace.
Investec has five core business divisions: investment banking, capital markets, private client activities, asset management and property activities. Kensington will become part of Investec's capital markets division.
Kensington specialises in lending to non-traditional borrowers, such as the self-employed, contractors, older borrowers, temporary employees and those with bad credit history.
"The Investec Group is a strong specialist lender and will be bringing its entrepreneurial culture, robust risk management discipline and competitive funding to boost Kensington's acceleration into new products, channels and markets." Kensington chairman Peter Birch said.
The Investec Group is the parent company of Investec Bank (Australia) which has offices in Sydney, Melbourne, Brisbane and Perth.
