Bluestone management complete buy-out of Group

Bluestone Group has been taken over in a management buyout part-funded by BOS International, a HBOS Australia subsidiary. The buy-out, for an undisclosed sum, was led by Founder and Executive Chairman, Alistair Jeffery. Mr Jeffery is the majority shareholder in the new Group.Bluestone is one of the leading non-conforming mortgage lenders in Australia and New Zealand. It was established in 2000, initially as a provider of residential mortgages to borrowers falling outside traditional bank criteria. The business expanded into New Zealand in 2003 and established a reverse mortgage business in 2004. Bluestone Equity Release is now the largest non-bank reverse mortgage lender in Australia. The Group has total assets in excess of $3b and reported cash earnings (CEBITDA) in the 6 months to December, 2007 of $15.8m. Corporate net assets (excluding Trust structures) exceed $35m.The management team led by Mr Jeffery includes Peter McGuinness, Group CEO and Mike Dilworth, CEO of Bluestone Servicing.Following the completion of the buyout, the company says it will be focussing on expanding its third party servicing and special servicing capabilities, whilst maintaining an origination footprint in Australia and New Zealand. The business recently agreed terms with Westpac Banking Corporation for a renewed $480m committed warehouse facility to support residential origination in Australia and NZ.Bluestone Servicing was established with a $5m investment in 2006, the proceeds of which were used to acquire and adapt a high quality platform system for higher intensity non-conforming mortgage management. Bluestone will also be expanding Bluestone Capital Management, a funds management business focussing on non-performing portfolios and loss mitigation strategies for financial institutions.Mr Jeffery said: “The buyout is a new chapter in the exciting history of Bluestone. I am very enthusiastic about the prospects for the business, and I’m delighted we have been able to gain the support of BOS International to back the transaction.“Bluestone has developed a reputation for identifying and capitalising on opportunities in challenging, rapidly changing markets. The current volatility in the capital markets is giving rise to a number of fascinating opportunities, where nimble and imaginative players will be able to prosper. The financial and tactical support of HBOS has been invaluable in helping us take control of the business”.Peter Shear, Head of Corporate and Structured Finance at BOS International, led the banks team on the buyout. He said:”Alistair and his management team have a long standing record of delivering success in the specialist mortgage market in Australia and New Zealand. We are delighted that our support has provided the team with the opportunity to purchase the business and we look forward to further growth in the coming years”.