The REA Group Limited (ASX: REA) share price is trading lower today despite the release of an announcement.
In early trade, the property listings company's shares are down 0.5% to $168.23.
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What did REA Group announce?
Investors have been selling REA Group's shares on Thursday despite it announcing the completion of its acquisition of Mortgage Choice Limited (ASX: MOC). This follows the approval of the scheme by the requisite majorities of Mortgage Choice shareholders.
REA Group is paying $1.95 per share to acquire the mortgage broker, which represents an enterprise value of approximately $244 million.
Mortgage Choice is a leading Australian mortgage broking business with more than 500 brokers, 380 franchises across the country, and over 30 lending partners. It currently has a loan book of $54 billion dollars and settlements of $11 billion dollars in the 12 months to December 2020.
The company reported net revenue of $22.2 million and a net profit after tax of $4.1 million for the first half of FY 2021.
Why is REA Group acquiring Mortgage Choice?
When announcing the proposal in March, REA notes that it aligns with its financial services strategy by leveraging its digital expertise, high intent property seeker audience and unique data insights across a larger network.
It also believes the acquisition of Mortgage Choice provides a compelling opportunity to establish a leading mortgage broking business with increased scale. This complements the existing Smartline broker footprint and results in greater national broker coverage.
This morning, REA Group Chief Executive Officer's, Owen Wilson, commented: "The completion of the Mortgage Choice acquisition represents an exciting milestone for our combined businesses. We're extremely pleased to welcome the Mortgage Choice team into REA. Together, we look forward to accelerating REA's financial services strategy to become a leading player in the home loan market."
The REA Group share price is up 57% over the last 12 months.
