LONDON (Reuters) - British home repairs provider HomeServe is stepping up its expansion in the United States by buying Dominion Energy’s home services unit, which has 500,000 customers across 16 states.
The company said it would raise up to 125 million pounds ($165 million) in a share placing to fund the deal, which has an enterprise value of $143 million. That also gives it the firepower to do more, with opportunities in the United States, its European markets and in new regions such as Latin America.
“It gets us closer to our medium-term target, which is to be marketing to 80 million households (in the U.S.), and to get 10 percent of those signed up to cover,” Chief Executive Richard Harpin said in an interview.
The deal gives HomeServe access to 7.1 million additional households in 16 states in the mid-Atlantic region, he said.
Harpin said its U.S. operations could achieve a 20 percent net profit margin, generating $160 million of profit a year in the medium term, which is more money than the whole group made last year.
He said the group could have funded the deal from its existing finances and debt, but it was raising equity because it had “a really exciting pipeline” of acquisition opportunities in the United States, Britain and France, and could potentially enter markets such as Latin America.
HomeServe said it had a good first six months of the year and it remained on track to deliver further strong growth for the full financial year.
Reporting by Paul Sandle; Editing by Keith Weir