TA Associates, a leading buyout and private equity firm,
today announced the completion of a majority stake investment in
Professional Warranty Service Corporation (PWC), a leading provider of
new home warranty products and administration services to residential
construction firms.
PWC's warranty products are developed in conjunction with its long time partner Zurich Financial Services, a leading property casualty insurance provider. PWC's most successful product provides warranty services in conjunction with a general liability insurance policy issued by Zurich to the nation's largest home builders. This unique insurance policy incorporates an express warranty that provides a vehicle for builders and homeowners to quickly agree on defects that need to be remedied and provides for binding arbitration for those few instances wherein an agreement is not possible. This arbitration procedure allows an independent third party arbitrator to resolve disputes promptly and completely without the time and expense of litigation. As the warranty administrator, PWC acts as the chief liaison among all constituents, including builders, homeowners, engineers, inspectors and arbitrators. PWC focuses on the largest tier of domestic residential construction firms, and its clients include more than 75 of the 200 largest U.S. homebuilders. The company is headquartered in Chantilly, Virginia.
"PWC's warranty product is revolutionizing the legacy system of litigious and inefficient conflict resolution between insurers, homebuilders and their homeowner customers," said Michael Berk, a Principal at TA Associates who will join the Company's board of directors. "As a growth company with an attractive, recurring revenue business model, PWC fits squarely into our investment profile. In keeping with TA's mission, we anticipate a close and productive working relationship with PWC's talented management team to further grow the company's business."
"We are very pleased to partner with TA Associates," said Michael Burns, CEO of Professional Warranty Service Corporation. "TA will provide the working capital we need to support our recent growth and develop additional products and services, in conjunction with Zurich, for the benefit of our homebuilder customers."
The domestic residential builder market is highly fragmented, characterized by approximately 20 mega builders, 300 large builders and 30,000 smaller builders that operate in limited regional areas. The new home warranty industry is approximately $240 million in annual revenue, representing about 30% penetration of the entire addressable new home construction market, according to Banc of America Securities.
"PWC is the clear market leader in providing and administering new home warranties to the large builder segment, and we see additional opportunities among smaller builders," said Richard Tadler, a Managing Director at TA Associates, who will also join the Company's board of directors. "With the customer service, speed and flexibility in handling claims, and credibility that homebuilders seek, PWC is well positioned to continue growing its market share."
Founded in 1968, TA Associates is one of the world's leading private equity firms and has invested over $1 billion in financial services companies. Some of TA's prior investments in this sector include Cardtronics, Clayton Holdings, CoreLogic Systems, Datek Online Holdings (Ameritrade Holding Corporation), eSecLending, GlobeOp Financial Services, The IntercontinentalExchange, ION Trading Group, The Island ECN (Instinet Group Incorporated), Lava Trading, OpenLink Financial and Payment Services Company.
Goodwin Procter served as legal counsel to TA Associates. Dilworth Paxson provided legal services to PWC.
Professional Warranty Service Corporation
Professional Warranty Service Corporation (PWC) provides warranty programs for new construction homebuilders, with a customer base that includes many of the nation's largest residential builders. The warranty coverage provides for impartial third-party arbitration, with multiple layers of protection for all parties and transferability among homeowners. All insurance risk in PWC products is borne by Zurich Financial, a leader in U.S. property/casualty insurance coverage. PWC's 10-year warranty program is HUD approved. Founded in 1995, PWC is headquartered in Chantilly, Virginia. www.pwsc.com.
TA Associates
Founded in 1968, TA Associates is one of the largest and most experienced private equity firms. With offices in Boston, Menlo Park and London, the firm manages $10 billion in capital and has invested in more than 360 companies. TA Associates provides growth equity capital, leveraged recapitalization and management buyout financing primarily for technology, financial services, business services, consumer and healthcare businesses. More information about TA Associates can be found at www.ta.com.
Safe harbor statement under the U.S. Private Securities Litigation Reform Act of 1995: Statements made in connection with this release which are not historical fact, such as forward-looking statements concerning future financial performance and growth, involve risk and uncertainties. Such statements are subject to various factors that could cause actual results to differ materially from those set forth in the forward-looking statements. Any forward-looking statements represent the best judgment of TA Associates and Professional Warranty Service Corporation as of the date of this release. TA Associates and Professional Warranty Service Corporation disclaim any intent or obligation to update any forward-looking statements.
PWC's warranty products are developed in conjunction with its long time partner Zurich Financial Services, a leading property casualty insurance provider. PWC's most successful product provides warranty services in conjunction with a general liability insurance policy issued by Zurich to the nation's largest home builders. This unique insurance policy incorporates an express warranty that provides a vehicle for builders and homeowners to quickly agree on defects that need to be remedied and provides for binding arbitration for those few instances wherein an agreement is not possible. This arbitration procedure allows an independent third party arbitrator to resolve disputes promptly and completely without the time and expense of litigation. As the warranty administrator, PWC acts as the chief liaison among all constituents, including builders, homeowners, engineers, inspectors and arbitrators. PWC focuses on the largest tier of domestic residential construction firms, and its clients include more than 75 of the 200 largest U.S. homebuilders. The company is headquartered in Chantilly, Virginia.
"PWC's warranty product is revolutionizing the legacy system of litigious and inefficient conflict resolution between insurers, homebuilders and their homeowner customers," said Michael Berk, a Principal at TA Associates who will join the Company's board of directors. "As a growth company with an attractive, recurring revenue business model, PWC fits squarely into our investment profile. In keeping with TA's mission, we anticipate a close and productive working relationship with PWC's talented management team to further grow the company's business."
"We are very pleased to partner with TA Associates," said Michael Burns, CEO of Professional Warranty Service Corporation. "TA will provide the working capital we need to support our recent growth and develop additional products and services, in conjunction with Zurich, for the benefit of our homebuilder customers."
The domestic residential builder market is highly fragmented, characterized by approximately 20 mega builders, 300 large builders and 30,000 smaller builders that operate in limited regional areas. The new home warranty industry is approximately $240 million in annual revenue, representing about 30% penetration of the entire addressable new home construction market, according to Banc of America Securities.
"PWC is the clear market leader in providing and administering new home warranties to the large builder segment, and we see additional opportunities among smaller builders," said Richard Tadler, a Managing Director at TA Associates, who will also join the Company's board of directors. "With the customer service, speed and flexibility in handling claims, and credibility that homebuilders seek, PWC is well positioned to continue growing its market share."
Founded in 1968, TA Associates is one of the world's leading private equity firms and has invested over $1 billion in financial services companies. Some of TA's prior investments in this sector include Cardtronics, Clayton Holdings, CoreLogic Systems, Datek Online Holdings (Ameritrade Holding Corporation), eSecLending, GlobeOp Financial Services, The IntercontinentalExchange, ION Trading Group, The Island ECN (Instinet Group Incorporated), Lava Trading, OpenLink Financial and Payment Services Company.
Goodwin Procter served as legal counsel to TA Associates. Dilworth Paxson provided legal services to PWC.
Professional Warranty Service Corporation
Professional Warranty Service Corporation (PWC) provides warranty programs for new construction homebuilders, with a customer base that includes many of the nation's largest residential builders. The warranty coverage provides for impartial third-party arbitration, with multiple layers of protection for all parties and transferability among homeowners. All insurance risk in PWC products is borne by Zurich Financial, a leader in U.S. property/casualty insurance coverage. PWC's 10-year warranty program is HUD approved. Founded in 1995, PWC is headquartered in Chantilly, Virginia. www.pwsc.com.
TA Associates
Founded in 1968, TA Associates is one of the largest and most experienced private equity firms. With offices in Boston, Menlo Park and London, the firm manages $10 billion in capital and has invested in more than 360 companies. TA Associates provides growth equity capital, leveraged recapitalization and management buyout financing primarily for technology, financial services, business services, consumer and healthcare businesses. More information about TA Associates can be found at www.ta.com.
Safe harbor statement under the U.S. Private Securities Litigation Reform Act of 1995: Statements made in connection with this release which are not historical fact, such as forward-looking statements concerning future financial performance and growth, involve risk and uncertainties. Such statements are subject to various factors that could cause actual results to differ materially from those set forth in the forward-looking statements. Any forward-looking statements represent the best judgment of TA Associates and Professional Warranty Service Corporation as of the date of this release. TA Associates and Professional Warranty Service Corporation disclaim any intent or obligation to update any forward-looking statements.
© 2006 Business Wire
