HomeServe goes stateside with £108m takeover
Revenue grew 13% in the first six months of the financial year, the emergency repairs business said.
British emergency repairs business HomeServe has exported its Home Experts business across the pond for the first time with a 140 million dollar (£108 million) swoop on US business eLocal Holdings.
HomeServe revealed it was taking a 79% stake in the firm, giving it a profitable foothold in the North American market.
The deal also gives London-listed HomeServe the right to buy the rest of the company in time.
“We are delighted to have agreed to buy a majority shareholding in eLocal,” said chief executive Richard Harpin.
Bruce Aronow, eLocal’s founder, said: “The entire eLocal team is extremely excited to have been chosen as the platform to build the Home Experts business in the US.”
We expect HomeServe management to grow it and invest in it Liberum
The Home Experts unit includes Checkatrade in the UK, Spain’s Habitissimo, and Home Experts France. It turned over £40 million in the last financial year.
Analysts at Liberum said the acquisition “clearly provides a strong foundation from which to launch HomeServe’s ambitions in North America”.
“We expect HomeServe management to grow it and invest in it,” they added, highlighting the company’s 40% expected organic growth this year.
It came as HomeServe said it had grown pre-tax profit by 2% year on year in the last six months.
Profit before tax was £19.7 million, while revenue grew 13% to £458 million, after acquisitions of heating and ventilation companies.
Parts of the business have performed at the top of expectations, but management said its outlook remains unchanged, apart from a 5 million US dollar (£4.5 million) addition to adjusted operating profit from the acquisition of eLocal.
“I am very pleased with our financial performance and strategic progress in the first half of this year,” said Mr Harpin.
“All of our membership businesses performed well, with North America continuing to deliver strong growth, and interesting opportunities in all our European businesses to develop new partnerships, harness new technology and continue to improve customer service and efficiency.”
Investors reacted well to the news, sending shares up 6.26% to 1,273p.