The board of Surrey-based Network Data, a services specialist for the mortgage industry, has entered into an agreement to buy two companies. 

The board of Surrey-based Network Data, a services specialist for the mortgage industry, has entered into an agreement to buy two companies.

The company is to acquire Mortgage Broking Services (MBS) and Networks for £2.2 million, to be satisfied by the issue of redeemable convertible preference shares.

In addition, a further £250,000 of redeemable convertible preference shares are to be subscribed for by MBS in cash.

According to a Network Data press release, the acquisitions are to be made to complement its operations. There are a number of duplicated administrative functions such as accounts, marketing, training & competence and compliance. As such, Network Data’s board expects the acquisition to lead to significant cost savings.

Richard Griffiths, chief executive of Network Data, said: “We are delighted to have completed the largest merger of two mortgage networks since the inception of FSA regulation of the mortgage market four years ago.

“Consolidation of the networks market is long overdue, and we expect the trend to accelerate with many of the smaller networks struggling in the current weak market conditions. As the largest mortgage network we intend to play our part in this process and take advantage of the cost saving opportunities.”

MBS’s turnover for the year ended 31 December 2007 was £3.9 million, with its audited loss before tax standing at £349,000. Its audited net assets were worth £135,000 at the same date.