However, if assets under management (AUM) thresholds and growth milestones are met a further £35 million may be added.
PES provides end-to-end loan servicing and asset management across residential and commercial sectors, with strong market positions and longstanding customer relationships in the UK, Ireland, Spain, Greece and Cyprus.
The acquisition will deliver immediate scale for Link Group’s Banking and Credit Management (BCM) division in existing and new jurisdictions. Link Group is listed on the Australian Securities Exchange and has clients from all industries, including some of Australia’s largest pension funds and global corporations.
Headquartered in London, PES has around £40 billion of AUM and employs 880 people. The firm is strongly aligned with BCM’s focus on new lending services and bank outsourcing, as well as performing and non-performing loan management.
The transaction does not impact on the services provided to residential or commercial customers serviced by PES whose terms, conditions and contact points will not change.
This acquisition is subject to regulatory approvals and is expected to be completed in the second half of 2020. Once completed, PES will integrate with Link Group’s BCM and the combined business will have around £130 billion of AUM and employ over 1,800 people.
Robbie Hughes, CEO, Banking & Credit Management, Link Group commented: “In 2019, we set our strategic vision to become the leading independent servicer in Europe with an expanding global footprint. This transaction accelerates that vision and will see two high-quality businesses integrated to create a leading pan-European asset servicer and manager, with significant potential for growth in existing and new markets.
“This is a very exciting opportunity for BCM, PES, our collective teams and clients. Together with PES, we will provide a best-in-class proposition to clients from our deep talent pool, from our enhanced infrastructure and through a diversified client base.”
Fraser Gemmell, CEO of Pepper European Servicing, added: “We’re delighted to have completed this deal, which reflects very positively on the quality of the PES business and our team.
“We believe it’s very good news for our clients and people as it will facilitate the ongoing growth of the business while also providing Link Group with the opportunity to accelerate its European growth plans through the creation of a leading pan-European multi-asset servicer, which will leverage the combined strengths, experience and capabilities of the Pepper and Link platforms to deliver market-leading services for investors and financial institutions from across the globe.”
This acquisition does not include the Pepper Group’s Pepper Money lending businesses operating in the UK and Spain, which will continue to operate as normal and Pepper intends to continue expanding.
