One of the big four banks has announced that it has acquired property platform PEXA as part of a consortium, which it claimed “represents our continued commitment to support the property industry”.
In a statement to the ASX, Commonwealth Bank revealed that it has acquired Property Exchange Australia Limited (PEXA) in a joint bid with Morgan Stanley Infrastructure Partners and Link Administration Holdings Limited.
PEXA is an online tool for assisting with the lodgement of documents to Land Registries as well as the electronic financial settlements on property transactions.
According to its website, PEXA has managed more than 1.7 million transactions worth a combined $237 billion. It states that the company was founded in 2010 “to fulfil the Council of Australian Governments’ (COAG) initiative to deliver a single, national e-conveyancing solution to the Australian property industry”.
Its network of 7,581 members include real estate agents as well as others involved in the property transaction process like lawyers, conveyancers, developers and financial institutions.
The bid by the trio was officially approved by PEXA’s shareholders this month, having first been lodged on 8 October and subsequently increased on 5 November.
As part of the takeover, CBA will inject $50 million into PEXA and assume a 16 per cent equity stake on the business, increasing its existing stake in the business of 13.1 per cent.
The bank’s CEO, Matt Comyn, labelled the move a sign of CBA’s faith in the Australian property industry.
“Having been a key stakeholder in PEXA since its inception in 2011, today’s announcement represents our continued commitment to support the property industry as it transitions towards an innovative, fully digital settlements process that aims to provide improved experiences for customers.”
PEXA did not respond to specific questions, but it referred REB to a separate statement noting that the agreed acquisition price “represents an implied enterprise value for PEXA of at least $1.5 billion”.
The company noted that completion of the sale remains dependent on a number of conditions being met, but that it expects completion before the end of the year.
“The consortium, including Link and CBA as long-time shareholders of PEXA, together with the addition of one of the world’s leading infrastructure funds, Morgan Stanley Infrastructure Funds, have a combined track record of investing in, and strengthening, infrastructure and technology assets,” PEXA chairman Alan Cameron said.
“We are very confident they are well positioned to support PEXA’s future growth and contribute to further industry transformation.”
CEO Marcus Price added: “The sale of the business comes at a natural time in the company’s evolution, to both crystallise a return for shareholders and to transition to a new aligned ownership base, capable of leveraging the company’s advantageous position to drive our multi-horizon growth strategies.
“PEXA has always been about making the process of buying and selling more efficient and transparent, and the industry response has been overwhelming, with PEXA now accounting for more than half of all property settlements nationwide.”