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  • Link Administration (LNK) is selling off its Banking and Credit Management (BCM) arm to Ireland-based LC Financial Holdings for €30 million (A$48 million)
  • LC Financial will pay €20 million in cash at the completion of the deal, plus a €5 million deferred cash payment within 12 months and earn-out fee of €5 million
  • Link CEO and Managing Director Vivek Bhatia says the sale is part of a wider simplification strategy for the financial record-keeping tech company
  • The company says its liquidity position remains “strong”, and the sale proceeds will be used to pay down debt
  • Shares in Link are up 0.99 per cent to $2:04 at 10:11 am AEDT

Link Administration (LNK) has agreed to sell off its Banking and Credit Management (BCM) arm to Ireland-based LC Financial Holdings for €30 million (A$48 million).

The sale comes as part of a wider simplification plan for Link.

The superannuation record-keeping tech company said as part of the sale, LC Financial would pay an initial €20 million upfront upon the completion of the deal, a €5 million deferred payment within 12 months, and a €5 million earn-out fee based on BCM’s performance within the first two years after the sale.

Link said its liquidity position remained “strong”, and it would use the proceeds from the BCM sale to sell down debt.

“After the completion of the sale of its BCM business, Link Group’s pro-forma leverage ratio will remain in the guidance range of 2x to 3x, consistent with Link Group’s target capital structure,” the company said in a press release.

Link re-affirmed its recent 2023 financial year guidance, predicting operating earnings before interest and tax (EBIT) to be up between 10 and 12 per cent compared to the previous financial year.

LC Financial CEO Paul Burdell said the BCM business was “highly regarded” in its sector and complementary to the existing group of companies under the LC umbrella.

“We have the desire, skill and determination to help the BCM leadership team to create a best-in-class, global mortgage and loan servicer,” Mr Burdell said.

“BCM has an excellent roster of banking and investor clients in Ireland, the UK, Italy and the Netherlands and we are confident that they will continue to provide an outstanding service.”

Shares in Link were up 0.99 per cent to $2:04 at 10:11 am AEDT.

LNK by the numbers
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