Houlihan Lokey Advises Patron Capital

Houlihan Lokey is pleased to have advised Patron Capital, the Pan-European institutional investor focused on property-backed investments, on its sale of Optimum Credit Ltd to Pepper Money (PMB) Ltd. 

Pepper Money has finalised the terms to acquire 100% of the second-charge lender, Optimum Credit, as part of its ongoing UK growth strategy.

The purchase, which remains subject to regulatory approval, will see Pepper Money acquire Optimum Credit’s entire business, which includes a UK second-charge loan book of more than £450 million.

Optimum Credit, which is based in Cardiff, Wales, was launched in 2014 and offers a range of variable, fixed, and discounted second-charge mortgages to homeowners in England, Wales, and Scotland. The business is expected to continue its current strategy in relation to second-charge mortgage origination, drawing on existing funding methods, including public capital markets issuance.

Keith Breslauer, Managing Director of Patron Capital, commented, “Having identified the opening for a non-bank second-charge mortgage lender and backed Optimum Credit’s experienced management team to set up the business around four years ago, the company has flourished and has been an exceptionally successful investment. We are proud to have grown Optimum Credit into a market leader in the non-bank mortgage space, with more than 25% market share, and look forward to seeing Sam and his team continue to build on their success under new ownership.”

Laurence Morey, Chief Executive Officer of Pepper Money, commented, “Earlier this month, we announced that Pepper Money was starting the journey of seeking a banking licence and that we would be considering targeted acquisitions to complement our organic growth plans for the business. We are delighted to have been able to agree the purchase of Optimum Credit, subject to receipt of regulatory approval. I am pleased to welcome the market-leading team at Optimum Credit into the Pepper Money family. We are looking forward to how this acquisition will enhance the growth of Pepper Money’s intermediary-led secured lending proposition and are excited at the prospect of supporting the Optimum Credit team in the continued development of their unique proposition supported by excellent systems and intermediary relationships in an exciting market segment.”

Sam Marshall, Chief Executive Officer of Optimum Credit, said, “We are pleased to be joining the Pepper Money team in the UK. Pepper Money has shared a very similar development journey to ours at Optimum Credit; we share a common culture and entrepreneurial approach, with the intermediary and UK residential property owner at the core of our proposition. This acquisition will give Optimum Credit access to a wider range of resources and shared expertise that will enhance our business and enable our continued growth.”

Houlihan Lokey acted as the exclusive financial adviser to Patron Capital. This most recent transaction further strengthens Houlihan Lokey's leadership in the specialty finance and secured lending space and highlights its momentum and leadership in the financial institutions sector. This year, Houlihan Lokey’s announced EU FIG transactions have included the acquisition of Small World by Equistone*; the sale of Titlestone to Paragon Bank; the sale of Robidus to Aegon; the sale of BIK Brokers to Pollen Street Capital; the sale of Close Brothers Retail Finance to Klarna; and Masthaven’s £60 million capital investment from Värde Partners. 

*The acquisition of Small World by Equistone was announced by Quayle Munro prior to its acquisition by Houlihan Lokey to establish the Data & Analytics Group.