Computershare shares lift on US business sale
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More news: Shares in Computershare were up 1.3% to $26.14 in early trading despite a broader selloff on the ASX, after the share registry firm agreed to sell its US mortgages business for US$720 million ($1.13 billion). The transaction will allow the company flexibility to pursue strategic investments and consider further capital management opportunities, and is not expected to have any material impact on its FY24 earnings per share guidance.
Computershare sells US mortgage business for $1.1b
The news: Share registry firm Computershare has agreed to divest its US mortgage business to asset manager Rithm Capital, as part of its simplification strategy.
The numbers: Computershare said it will sell the business for USD720 million ($1.13 billion). The transaction, which is expected to close by March 2024, will result in a one-off statutory pre-tax loss of approximately USD150 million to USD180 million under IFRS accounting adjustments.
The context: Computershare has faced criticism since moving into the complex mortgage solutions and analytics business in 2016. It said the sale was part of executing a simplification strategy to drive an increase in the quality and consistency of earnings. The proceeds will also allow flexibility to pursue strategic investments and consider further capital management opportunities, it said.
What they said: “The divestment of US Mortgage Services allows us to focus our efforts on our core businesses which have high levels of recurring revenues, long-term growth runways, low capital intensity and attractive returns through the cycle,” chief executive Stuart Irving said.
The source: ASX announcement
