Barclays Bank UK has agreed to acquire UK specialist mortgage lender Kensington Mortgage Company (KMC) for a total consideration of around £2.3bn.
KMC is being sold by its private equity owners including funds managed by Blackstone Tactical Opportunities Advisors and funds affiliated with Sixth Street Partners.
Based in Berkshire, England, KMC is a specialist residential mortgage lender that offers mortgages through brokers.
The company has around 600 employees and leverages unique technology, data analytics and insights to design mortgage products for customers with complex incomes.
Barclays Bank UK CEO Matt Hammerstein said: “The Transaction reinforces our commitment to the UK residential mortgage market and presents an exciting opportunity to broaden our product range and capabilities.
“KMC is a best-in-class specialist mortgage lender with an established track record in the UK market, strong broker and customer relationships and data analytics capabilities.
“KMC complements our existing UK mortgage business and broker relationships through the addition of a specialist prime mortgage originator and the utilisation of our strong UK funding base.”
In addition to KMC, Barclays will acquire Kensington Mortgage Services (KMS).
Also, it will acquire a portfolio of UK mortgages originated by KMC, starting from October last year until the acquisition of KMC and KMS, dubbed KMC Mortgage Portfolio.
KMC Mortgage Portfolio totalled £1.2bn as of 31 May 2022, containing around 70% owner-occupied and 30% buy-to-let residential mortgages, with a weighted average LTV of 77%.
The acquisition is expected to complete in late Q4 2022 or early Q1 2023, subject to receipt of the regulatory approval.
Barclays said that the acquisition would help widen its product offering and capabilities in the UK mortgage market and extend its customer base.
The company intends to finance the acquisition from its existing resources and is estimated to reduce Barclays’ CET1 ratio by around 12 basis points assuming completion in late Q4 2022.
