HomeServe completes first phase of £108m US acquisition

Home repairs group HomeServe has completed the latest phase of its US expansion plan.

The Walsall-based group announced in October that it had acquired certain trade and assets of the home cover business of Dominion Products and Services, a wholly owned subsidiary of Dominion Energy Inc, in a deal valued at £108m.

It said today that it had completed acquisition of the first tranche of the trade and assets.

In conjunction with the acquisition, HomeServe also announced a share placing aimed at raising £125m – which represents approximately 5% of the existing issued share capital of the company.

Dominion Products and Services, based in Richmond, Virginia, offers a variety of home protection programmes across 16 states, concentrated in the Mid-Atlantic region.

The transaction brings a growing customer base of 0.5 million customers and 1.1 million policies, and will provide HomeServe with access to 7.1 million additional households.

The total value of the transaction is $143m (£108.33m). This includes $20m of deferred consideration payable on a straight line annual basis over 10 years, with payments expected to start in 2019. The remaining consideration is payable in two tranches that are broadly commensurate with the total number of policies to be transferred in each tranche. Tranche 1 brings c.0.3 million customers, c.0.6 million policies and c.4.3 million households. Tranche 2 brings c.0.2 million customers, c.0.5 million policies and c.2.8 million households.

The Tranche 1 acquisition has completed following US competition clearance.

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