Yellow Brick Road buys Resi Mortgage for $36m

Yellow Brick Road has announced it will acquire the privately owned non-bank lender Resi Mortgage Corporation as part of its push to gain market share from the major banks.

YBR will pay $36 million for the business – $28 million in cash, $5.5 million in shares and $2.5 million in deferred cash payments.

Expanding the business: Yellow Brick Road executive chairman Mark Bouris.Credit: James Alcock

YBR executive chairman Mark Bouris said in a statement that the acquisition of the 30-year old business would enhance his company's national presenceand allow YBR to distribute products through its network.

The company also announced that it had secured $42.05 million of commitments, more than the $38 million amount it intended to raise. The raising was placed to existing shareholders and institutional clients of Bell Potter.

Existing shareholders Macquarie Bank and Nine Entertainment subsidiary subscribed to $12 million each in the placement while other institutional investors accounted for the remaining $18.5 million.

The company said the funds will be used to pay for the cash considerations of the Resi and Vow acquisitions.