LSL spreads mortgage wings with joint venture
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ANDREW KNEE: STABILITY IS CRUCIAL
LSL Property Services has expanded further into the mortgage market by acquiring a stake in Legal Marketing Services and LMS Direct Conveyancing.
As part of the deal LSL, Connells and the conveyancing firms’ existing management team have entered into an equal joint share venture.
LSL and Connells are paying £672,000 each for a 33.33% share in the business through investment in the firms’ parent company Cybele Solutions Holdings.
The agreement includes options that would enable LSL and Connells to boost their investment in the future from 33.33% to 50% each.
In January 2011 LMS Holdings Limited, which owned the shares in Legal Marketing Services and LMS Direct Conveyancing, went into administration.
The shares were then sold to Cybele Solutions Holdings, a firm set up by the directors of LMS Direct Conveyancing. The directors were sold the shares for £515,000. They paid £160,000 in January and £115,000 in February. A further £240,000 is payable in eight instalments of £30,000, with the first commencing on June 22 and the final payment due on January 22 2012.
Andy Knee, managing director of LMS Direct Conveyancing, says the firm has adapted well to market challenges and has realised its customers and lenders seek not just good service, but also reassurance of long-term financial stability.
He says: “The joint venture will allow us to offer this and to provide solutions to meet the needs of lenders that bulk conveyancing firms will find difficult to match.”
In January 2006 private equity fund RJD Partners bought a 51% stake in LMS Holdings Limited.
LMS Group Holdings Limited, the former holding group of LMS Holdings Limited, made a £38m loss in 2010. This was due to a £12.4m exceptional charge resulting from the administration and a £22m write-down, reflecting the fall in value between when RJD made its investment and when the business was sold in January 2011.
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