HomeServe to buy home boiler installer Help-Link
Updated : 10:34
FTSE 250 repairs and home improvements company HomeServe has agreed to buy home boiler installer Help-Link in a deal that values the business at up to £22.7m, to create a new UK-wide home heating business, bringing together installations, servicing and repairs.
HomeServe will pay an initial consideration of £5m,which will be satisfied in cash on completion to the administrators and it will also settle £1.8m of Help-Link's bank overdrafts. From completion, Help-Link will have certain payment obligations under prior existing loan notes issued by it to NorthEdge Capital - its ultimate beneficial owner - of up to £15.9m, the payment of £15.5m of which is based on the trading performance of Help-Link in the three years following completion. In addition, HomeServe will settle £1.8 million of Help-Link's bank overdrafts at completion.
The deal is expected to be marginally earnings accretive for HomeServe in FY19.
Based in Leeds, Help-Link has over 250 employees including a national network of boiler installation engineers and an in-home sales force. It also offers boiler service and repair membership products and currently has approximately 17,000 customers.
On completion, Help-Link's people, management and headquarters will become part of HomeServe's UK network.
Martin Bennett, chief executive officer of HomeServe, said: "Of the one million homeowner boiler installations in the UK every year, the vast majority are undertaken by local and regional tradesmen. There is significant opportunity for a new end-to-end business to offer the accessibility of a local tradesman, combined with the scale and expertise of a national network.
"At HomeServe, we have invested significantly in gas servicing and repairs as well as in our boiler and smart thermostat installation capabilities. The acquisition of Help-Link boosts our installation resources and will help us give our customers the complete and competitive service we know they want. We look forward to welcoming the Help-Link team to the HomeServe family."
At 1000 BST, the shares were up 1.5% to 733.50p.