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GE Capital buys mortgage lender iGroup

GE Capital has bought mortgage lender iGroup for £200m in cash. The deal comes 18 months after an iGroup’s MBO.

GE Capital, the financial services arm of General Electric, has paid £200m for iGroup, a mortgage lender.

The deal means a £48m payday for the management team at iGroup, which completed an MBO from US firm Ocwen Financial in October 1999.

CEO Joseph Dlutowski and managing director David Johnson bought about 24 per cent of the company for about £1m in the £77m MBO from Ocwen. GE Capital plans to keep the iGroup management and brand.

iGroup is Britain' second-largest provider of mortgages, which are aimed at borrowers that find it difficult to get good mortgages, such as those with bad credit histories. It has about £1.6bn worth of assets and 52,000 clients.

iGroup was advised by Credit Suisse First Boston.