HomeServe buys out French partner in £83m deal
HOME repairs and maintenance provider HomeServe has bought out its joint venture partner in France in a deal estimated at £83m.
Walsall-based HomeServe said it had reached an agreement with Veolia Environment to acquire its 51% share of Doméo. HomeServe already owns the remaining 49% of the business.
Following completion of the transaction, which is expected to be finalised next week, Doméo and its subsidiary Doméo Assistance will be 100% owned by HomeServe.
HomeServe and Veolia have also agreed a long term marketing agreement providing Doméo with continued use of Veolia’s brands in France.
Doméo, established in 2001, is a leader in the provision of insured home emergency policies in France with 890,000 customers and 2.3m policies. The aggregate profit after tax, as reported in the statutory accounts of Doméo and Doméo Assistance, for the year ended March 31, 2011 was £11.3m. The aggregate gross assets as of the same date were £53.7m.
HomeServe said the acquisition gave it full control of Doméo and would enable it to further develop Doméo’s product range and broaden the range of its affinity partners in France.
The £83m will be paid in cash at completion and will be funded through existing bank facilities. Doméo’s revenues and profits are weighted to the final part of the financial year, where it is expected to generate around 45% and 60% of its revenues and operating profits respectively in the final four months of the fiscal year. The transaction is expected to be earnings accretive in its first full year.
Richard Harpin, HomeServe’s group chief executive, said: “HomeServe began its international expansion when the group entered France in 2001. I am delighted that, having set up the business organically, 10 years ago, with Veolia, we now have the opportunity to make Doméo a wholly owned part of HomeServe.
“This agreement will also enable us to continue our important trading relationship with Veolia in France through our new long term marketing agreement in addition to our agreements in the UK and our testing with Veolia Aqua in Italy.”
Jean-Michel Herrewyn, directeur général of Veolia Eau, said: “Veolia is pleased to be able to extend its relationship with HomeServe through the new marketing agreement. HomeServe’s product offering is an important part of the services that we offer our water customers not just in France but also in the UK and Italy and there is also the potential to work together via long term marketing agreements in some of our other territories in the future. “
