Direct
Energy, an integrated energy and services company in North America and a
subsidiary of Centrica plc, announced on June 10 its intention to acquire the
assets and business of Clockwork Home Services Inc. for $183 million.
Direct
Energy, an integrated energy and services company in North America and a
subsidiary of Centrica plc, announced on June 10 its intention to acquire the
assets and business ofClockwork Home Services Inc.for $183
million. The transaction, which remains subject to certain customary conditions
including approval by regulators in the United States and Clockwork’s
shareholders, is expected to be completed by July 1, 2010.
Direct
Energy Services and Clockwork Home Services will combine to become the largest
provider of heating and cooling, plumbing, and electrical services to more than
3 million households annually in North America.
“The
combination of Direct Energy and Clockwork Home Services brings together two of
the strongest and best home services businesses in North America to create the
category leader with network revenues of almost $4 billion. With our size and
coverage across virtually every state and Canadian province, we will transform
the home services [HVAC, plumbing, electrical] industry to bring homeowners’
exceptional customer service and value,” saidEddy Collier,
president, Direct Energy Services.
Jim Abrams, CEO of Clockwork Home
Services, said, “This has been in process for a little while now, so we are
very excited to announce the combining of our two great companies. Clockwork
has had substantial growth over the last decade, and we have been successful in
executing our long-term business plan of moving contractors from affinity
groups into franchises. Our three franchise brands are now the fastest growing
brands in North America for technical home
services. Combined sales of One
Hour Heating and Air Conditioning®, Benjamin Franklin Plumbing® and Mister
Sparky® is approaching half a billion dollars.
“Capital was the great constraint for us going forward.
Eddie Collier engaged me late last year in conversation to ensure the continued
great growth of both our companies. Direct Energy brings us access to
customers, capital, and sophisticated management that will help us continue to
grow. Their knowledge of home services agreements is much stronger than ours,
so we are very excited for the future. Our franchisees and employees have been
very supportive as we began notifying them of the change,” said Abrams.
Collier said, “We are incredibly thrilled because we have
8.5 million service agreements in the United Kingdom (UK) and would very much
like to see the North American market move in that direction. We feel that with
Clockwork’s presence in this market, we are ensured of tremendous success.”
“The
addition of Clockwork Home Services to our services business helps deliver on
Direct Energy’s growth strategy of being North America’s leading integrated
energy and services company,” noted Chris Weston, president and CEO, Direct
Energy. “This acquisition will also allow us to increase the proportion
of households that Direct Energy serves where we can offer both services and
energy supply, with the opportunity to increase our integrated offerings
through new Clockwork franchises.”
The
combined organization will operate in almost every state and Canadian province,
providing repair and maintenance services to customers’ heating and cooling
systems as well as energy efficiency related services to both homes and
businesses. Clockwork’s brands, customer service, and customer management
systems complement Direct Energy Services’ strong maintenance and service plan
product offering and market leadership in Canada. Direct Energy has 8.5 million
service agreements in place in the UK. The new organization will also
focus on obtaining state, provincial, and federal energy efficiency funding
that is widely available to help make North American homes more energy
efficient.
According
to Abrams, One Hour Heating and Air Conditioning, Benjamin Franklin Plumbing,
and Mister Sparky franchisees and owned operations, and Clockwork’s affinity
clients, will benefit from Direct Energy’s experience in the home services
industry as well as the financial support and UK energy services market
expertise of its parent company, Centrica plc.
“Direct Energy’s
5 million customer relationships in North America and access to capital markets
is critical to ensure the continued growth and investment in Clockwork’s
highly-successful brands and franchises,” said Abrams. “I am committed to
personally ensuring a cornerstone of the combined organization continues to be
helping owned-operations, franchises, and affinity clients rapidly expand their
businesses.”
The
Clockwork affinity client groups include: Plumbers’ Success International®,
AirTime 500®, and Electricians’ Success International®.
“Huge benefits to our affinity members will become available,”
said Abrams. “For example, our combined purchasing power will open up many new
opportunities. The shared technology that will be driving our business will
also benefit our affinity members. Some of our largest affinity members, who
did not wish to become franchises, still had strategic needs that were not
necessarily being met, such as long-term exit strategies. Such opportunities
will now open up with the increased capital strength of our company, and it
also opens up many more customer development opportunities.”
Clockwork Home Services will still be managed from Sarasota,
Fla.
UPDATE: Clockwork Home Services Sold to Direct Energy
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