Mortgage software companies snapped up in 'rare opportunity'

by AB05 Jun 2014
Australia’s largest financial services software group Rubik Financial has acquired two mortgage software companies in one fell swoop for $22.4 million upfront.

Rubik Financial announced on the ASX yesterday it has bought software provider Stargate Information Systems for an upfront $20 million, with a further payment of up to $15 million – so long as earnings remain above $3.2 million in the 2015 and 2016 financial years. 

Under the deal, Stargate's chief executive, Brett Spencer, will become Rubik’s managing director of mortgages.

The software giant has also entered a binding agreement to acquire another mortgage platform, Infinitive, for an upfront payment of $2.4 million and up to $14.1 million more over the next 18 months, subject to increased revenue.

Stargate and Infinitive handle around 25% of all Australian broker mortgage settlements through cloud-based desktop applications and gateway software – which means Rubik will become Australia’s largest independent supplier of mortgage desktop applications and second largest supplier of mortgage transactional gateway software.

Rubik’s strategy is to own cloud-based platforms with compatible applications and transactional gateways, in order to have a longstanding grip over the market by capturing license fees and transactional revenue.

The company said it has jumped on a “rare opportunity” to acquire both companies in a single move, thus establishing scale, revenues, profits and relationships instantly.

Rubik, which currently services 110 out of 171 Australian ADIs, plans to integrate the mortgage platforms with the company’s existing wealth and banking platforms.

The combination of the two businesses with Rubik’s existing businesses will generate significant “additional synergies” over time and help clients’ productivity – such as the potential to cross-sell to consumers, Rubik said.

Both transactions are fully funded out of cash reserves created by Rubik’s recent over-subscribed $33 million equity raising.

The company expects to pay no more than $4.5 million in one-off transaction and integration costs, largely to integrate the platforms.
 

COMMENTS

  • by iMac 5/06/2014 10:13:27 AM

    Lets hope Rubik can improve Stargate. I have I've Never worked with a bigger balls up waste of time software in my life. It is utterly useless. I wouldn't mind paying for software that was vaguely useful, but Stargate is useless. In fact its less than useless. I actually uses more of my time and achieves nothing. And I have to pay for it each month. I certainly wouldn't touch it if I wasn't forced to by my aggregator. I side step it at every possible opportunity. Lets hope Rubik scrap Stargate and go with Infinative, it is Far superior. Its Not great, just superior, and at least it is useable.

  • by jimmy 5/06/2014 11:10:43 AM

    We recently ditched all our user accounts (11+) from symmetrycrm, keeping only one for trailing commission payments to brokers. We have had a subscription with them for over 6 years.

    In this day and age its an absolute farce that it still cannot be used on ANY mobile device (iOS, Android, WinMo) and they even recommended clients not to use Google Chrome as they have significant memory leaks with this browser.

    Oh, they charge a $250 setup fee per user to input a name and generate a password. 'Cloud enabled' my rear end.

  • by James 5/06/2014 12:02:18 PM

    Wow...well done to Brett and his Team. I dont know what Jimmy & iMac have been smoking but I for one can tell you that the software I use from Stargate and the Symmetry CRM in particular is absolutely awesome. It sounds likes these 2 are computer illiterates who have unrealistic expectations.... Ive been using it for 5-6 years now and when I moved aggregators 2 years ago I specifically wanted one that used Symmetry as their CRM. Way to go guys and cant wait to see more awesome stuff from you.