Quadrant exits New Zealand lender Heartland

The Australian GP sold approximately 41.1 million shares to First NZ Capital Securities for NZ$1.30 apiece on May 7, according to a filing. Heartland shares closed at NZ$1.31 the previous day and they have since risen by more than 1.5% to reach NZ$1.33 as of late afternoon trading.

Quadrant's stake in Heartland came via Seniors Money International (SMI), the sole remaining portfolio company in its fourth fund, which closed at A$265 million (then $207 million) in 2005. It acquired a majority interest in SMI in 2006. The business helps people over the age of 60 release value thy have built up in their homes without having to move from it or make regular payments.

SMI's New Zealand and Australia home equity release mortgage assets were sold to Heartland for NZ$87 million in 2014. These assets had an aggregate value of approximately NZ$760 million, including mortgage portfolios, operational infrastructure and funding arrangements.

Heartland paid Quadrant and several minority investors in SMI NZ$43.3 million in cash and issued NZ$38.7 million in shares at a price of NZ$0.90 apiece. The shares were subject to a 12-month lock-up. On expiry of the lock-up in April of this year, the shares were released from escrow to Quadrant.

Heartland said that the acquisition would give it the product capability to meet the needs of the 65-plus demographic. These are typically people with the majority of their personal wealth tied up in their primary residential dwelling. SMI claimed to be the leading provider of home equity release loans in New Zealand and the leading non-bank provider in Australia.

The product of a merger involving several local building societies, Heartland focuses on household, business and rural services. It reported a net operating income of NZ$122.1 million for the year ended June 2014, up from NZ$106.9 million in 2013. Net profit rose from NZ$6.9 million to NZ$36 million.

Quadrant is currently investing its seventh fund, which closed at A$850 million ($758 million) in early 2014.

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• Topics
• Exits
• Australasia
• Financials
• Exit
• New Zealand
• Australia
• Quadrant Private Equity
• Financial Services