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Pink buy is impetus for push to the top

Simon Embley

LSL group chief executive Simon Embley believes the acquisition of Pink Home Loans brings the group close to achieving its target of becoming the pre-eminent distributor in the mortgage market.

The company bought Pink from Skipton Building Society last month for £1.59m.

Money Marketing revealed the two firms were close to a deal in August, when LSL conducted due diligence on the network. LSL also acquired BDS Mortgage Group as part of the deal. There are not expected to be any job losses.

The transaction is due to complete at the end of November following the change of control last month and would create a firm with 1,300 RIs. Pink had 434 RIs at the end of June.

LSL, a FTSE-listed business which includes estate agency and surveying services, bought the assets of network Home of Choice in May for £1.7m, after the network was forced into administration due to its inability to service its debts.

Embley says it is the company’s aim to be in the top two in the mortgage market and the deal to buy Pink has brought it very close to achieving it.

He says: “What we have been trying to do over the past couple of years, in each one of our core markets, is to be a significant player and for us that means being number one or number two in our key markets.

“Before we made the acquisition of Home of Choice, now known as First Complete, we were just outside the top 10 as a mortgage distributor. Home of Choice pushed us up to about sixth and we believe now that the acquisition of Pink has made LSL’s financial services business the third-biggest mortgage and protection provider in the UK.”

But Embley is keen to stress that LSL can achieve a breakthrough into the top two by growing the business as opposed to buying another firm.

He says: “We do not just get there by acquiring businesses. We also do quite a lot of work to grow our businesses organically. We are trying to get into the top two but we will use both organic and acquisitive means to do that.

“If a business came up for sale that we felt had the right quality and at the right price, we would probably look at it.”

The group uses a strategy that sees each of the individual firms under the umbrella organisation compete against each other in each of the markets in which LSL is present. Embley says this strategy will remain in place in the financial services sector and Pink and First Complete will not merge.

He says: “We operate a multi-brand strategy and we will operate a multi-brand strategy in financial services as well. We will have two networks which will be run separately by two different management teams and my job, as group chief executive, is to get the synergies between the two businesses and aggregate the scale and buying power of the two networks. We will not at any point in the future look to move them both to a single brand.”

Embley claims that Skipton neglected Pink but insists this will not happen under LSL.

He says: “The management team have been doing a pretty good job but have lacked the focus and the capital to invest in the business, because the current owner, Skipton, has had other priorities. What we will give the management team is the focus and the attention it needs to develop the business and give it the capital it needs to grow strongly.”

Embley adds that scale is key in the current environment, with distributors unable to survive without a big enough proposition. He believes the Pink deal has given the group enough scale in the sector to become successful.

He says: “The scale we have got, with the existing LSL business, the First Complete business and now the Pink business, drives synergies. To be a successful mortgage network today, you need to have scale to negotiate with providers and lenders. If you have not got scale, it is going to be very difficult to survive financially over the next two years. What we have done is built the scale we need to be able to survive.”


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