Homeserve Plc Acquisition of Help-Link UK Limited

Martin Bennett, CEO of HomeServe UK, 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."

Richard Harrison, Chief Executive of Help-Link, added: "Having established firm foundations for our business, we are looking forward to becoming part of the HomeServe family and making a significant contribution towards achieving national coverage."

Acquisition details

Help-Link's ultimate beneficial owner is NorthEdge Capital. To dissolve the current ownership structure and effect the sale of Help-Link to HomeServe, the acquisition is subject to the appointment of administrators from Ernst & Young LLP over Help-Link's immediate holding companies. HomeServe expects to acquire the entire issued share capital of Help-Link from the administrators in the coming days.

The consideration for the transaction is £5.0 million which will be satisfied by payment in cash on completion to the administrators. From completion, Help-Link will have certain payment obligations under prior existing loan notes issued by it to NorthEdge Capital of up to £15.9 million, the payment of £15.5 million 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 acquisition is expected to be marginally earnings accretive for HomeServe in FY19.

On completion, Help-Link's people, management and headquarters in Leeds will become part of HomeServe's UK network.

About Help-Link

Help-Link is a leading player in the UK domestic boiler installation market. Founded in 1989 and based in Leeds, the Company has over 250 employees including a national network of boiler installation engineers and an in-home sales force. Help-Link also offers boiler service and repair membership products and currently has approximately 17,000 customers.

Since 2015, Help-Link has been in a turnaround process following the end of the 'ECO' market for subsidised boiler installations (designed to reduce fuel poverty), which precipitated a significant downturn in installation volumes. For the year ended 31 March 2016, Help-Link's audited accounts showed revenues of £30.9 million, an EBITDA loss before exceptional items of £(9.7) million and a loss before tax of £(15.3) million, with gross assets of £3.5 million. In the year to 31 March 2017, the unaudited results of the Company show the EBITDA loss reducing to £(3.8) million and in the current year to 31 March 2018, Help-Link expects EBITDA to be marginally positive.

About HomeServe

HomeServe is an international home repairs and improvements business, with 7.8 million customers in the UK, North America, France, Spain and Italy as at March 2017. Its comprehensive range of water, heating and electrical assistance and repair products provide customers with peace of mind. HomeServe is listed on the London Stock Exchange, with a market capitalisation of £2.2 billion. 

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial condition, results and business of HomeServe plc. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. HomeServe's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.