Ausnet Financial Services Limited (ASX: AU1) has made a strategic, indirect investment in Australian back office technology and services company ServTech Global Holdings Limited (ASX: SVT).
As part of a consortium, Ausnet has entered into convertible loan agreements with ServNote, which has agreed to subscribe for a convertible note in ServTech with an initial investment of $500,000 using the funds loaned by the consortium. ServNote has the right (but no obligation) to increase the investment in ServTech which, if subscribed for, would take the total amount subscribed for by ServNote up to $1 million.
In addition to loaning funds to ServNote for the purpose of the investment in ServTech, Ausnet will conduct a review of the ServTech business so as to identify strategic synergies with Ausnet and its associated companies.
ServTech is the holding company of several wholly-owned subsidiary companies, including a real estate agency (Sell Lease Property Pty Ltd), a conveyancing business and a mortgage broking business.
It also owns a highly scalable unique customised Software as a Service (SaaS) workflow management platform, which it has implemented across its subsidiaries and has either implemented (or contracted to implement) into other significant Australian businesses.
Ausnet Managing Director Paul Niardone said his company believes significant efficiencies can be created between its own technology backed real estate and associated financial services businesses and Sell Lease Property Pty Ltd, which in addition to proprietary technology platform also has 220 real estate agents nationally and a small property rent roll.
“We believe significant synergies potentially exist between Ausnet, and its subsidiaries, and Sell Lease Property Pty Ltd and we are looking forward to exploring those further over the coming months,” Mr Niardone said.
“We believe through our involvement significant enhancements to the Sell Lease Property Pty Ltd business can be found, which at the same time will create immense benefit to Ausnet.”
Ausnet consists of a group of successful businesses which deliver finance broking, real estate services, settlement services, property management (2017), project marketing, insurance and financial planning initially to the Western Australian market with an aim to be rolled out nationally.
This model has been created to build the core asset being a loan book currently at ~$1.1 billion by cross referring clients between business units. The largest growing referral area has been built on a highly successful and disruptive real estate agency model named “The Agency”.