REG-Centrica plc Acquisition
5 September 2013
DIRECT ENERGY TO ACQUIRE US WATER HEATER RENTAL BUSINESS
Centrica plc’s North American subsidiary, Direct Energy, has agreed to acquire the US-based home services business AWHR America's Water Heater Rentals, LLC (“AWHR”) from MWHR, a US-based investment entity, for $30 million (£19 million) in cash plus working capital.
AWHR is the largest independent water heater rental business in the US and provides rentals, as well as related repair and maintenance services, to 80,000 residential customers located principally in the US Midwest, Florida and US Northeast. Direct Energy is a leading provider of water heater rental services in Ontario, Canada, where it currently has 1.1 million customers.
The AWHR business model, customer footprint and operations have a strong overlap with Direct Energy's existing services business. The acquisition will provide Direct Energy Services with an expanded product range and the opportunity to grow its customer base further in the US - offering rentals alongside heating, air conditioning, plumbing and electrical services across its growing North American franchise business. It also presents cost saving opportunities.
Badar Khan, President and CEO of Direct Energy, said: "The acquisition of AWHR presents us with a unique opportunity to grow Direct Energy's customer base by maximising our existing expertise in water heater rental services. We will also benefit from operational efficiencies and expanded capabilities, as we seek continued growth in North America with the aim of doubling the profitability of our North American downstream business over the next 3-5 years."
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AWHR is headquartered in Canonsburg, Pennsylvania.
The transaction will be made through Centrica’s wholly owned subsidiary RSG Holding Corp.
The transaction is expected to close in 2013.
Direct Energy Services is the leading energy services company in North America, with more than 3 million customer relationships.