Home repairs business buys rival in £22.7m deal

Home repairs business HomeServe is to buy rival Help-Link in a deal that will see 250 staff move over to the stock market-listed group.

Help-Link, which is two years into a transformation strategy that is forecast to see it achieve operational profitability in the current financial year, sees the deal as being the next step in its development.

The sale, which is expected to be completed in the next few days, will be achieved through a pre-pack deal. EY is to be appointed as administrator over Help-Link’s immediate holding companies in a move that will “dissolve the current ownership structure and effect the sale of Help-Link to HomeServe”.

Leeds-based Help-Link reported pre-tax losses of £15.3m for the year to March 2016, having lost £8.1m in the previous year. In April, Help-Link’s chief executive Richard Harrison told TheBusinessDesk.com that the company’s turnaround had been “relentless, but successful”, and it is forecasting EBITDA will be marginally positive in the current year.

In a statement released this morning, Harrison said: “Having established firm foundations for our business, we are looking forward to becoming part of the HomeServe family and making a significant contribution towards achieving national coverage.”

It is owned by private equity firm NorthEdge Capital. NorthEdge invested £11m in 2013 and continued to support the company through its struggles, which were largely caused by the end of the ‘ECO’ market for subsidised boiler installations, which precipitated a significant downturn in installation volumes.

The deal values the business at up to £22.7m, of which £5.0m will be paid in cash immediately. HomeServe will also settle £1.8m of Help-Link’s bank overdrafts at completion.

NorthEdge will receive up to £15.9m, although almost all of that is based on Help-Link’s trading over the next three years.

“The acquisition of Help-Link boosts our installation resources and will help us give our customers the complete and competitive service we know they want,” said Martin Bennett, chief executive of Walsall-based HomeServe UK.

The acquisition is expected to be “marginally earnings accretive” for HomeServe in its 2019 financial year.

He added: “Of the one million homeowner boiler installations in the UK every year, the vast majority are undertaken by local and regional tradesmen. There is significant opportunity for a new end-to-end business to offer the accessibility of a local tradesman, combined with the scale and expertise of a national network.”

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