LONDON (dpa-AFX) - Home emergency business HomeServe Plc (HSV.L) announced Thursday that it has entered into an agreement to acquire home assistance business Utility Services Partners Inc for $75 million in cash on a 'debt free cash free' basis at completion.
The company expects to close the deal within three to four months following certain ordinary course regulatory approvals.
Utility Services is a provider of home assistance service line repair contracts in the U.S. and Canada through partnerships. It has over 300 partners and 0.4 million customers across these regions. It is also the only warranty company partner of the National League of Cities or NLC, an organisation dedicated to helping city leaders build better communities. USP, with 70 employees, recorded fiscal 2015 turnover of $30.9 million and adjusted EBITDA of $2.7 million.
Following completion of the acquisition, HomeServe will continue to manage USP from its current headquarters in Pennsylvania.
In FY18, the first full year of ownership, the company expects EBITDA to be enhanced by around $15 million, while in FY17, due to increased marketing investment and transaction costs the transaction is expected to be earnings neutral. HomeServe will fund the cash consideration at completion from the group's existing finance facilities.
HomeServe said it sees significant opportunities with the deal to improve the current penetration rate and provide customers with access to the broader range of HomeServe's products and services.
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