Dominion Energy selling its home repair services business to U.K.-based company
By ROBERT ZULLO Richmond Times
Oct 19, 2017
Dominion Energy Inc. is selling its home repair services business to United Kingdom-based home repairs provider HomeServe Plc.
Buying the Richmond-based Dominion Products and Services Inc. subsidiary, which has about 500,000 customers in 16 states, gives HomeServe a stronger foothold in the U.S. market.
HomeServe’s U.S. division has about 3 million customers in the U.S. and Canada, who sign up for plans to guard against the expense and inconvenience of unexpected home repairs and replacements including water and sewer lines, water heaters and kitchen appliances.
Financial terms of the deal, announced Thursday, were not provided. But HomeServe said it plans to raise about $165 million in a share offering to fund the deal, which has an enterprise value of $143 million, according to published reports.
The deal also includes a long-term agreement with Dominion Products and Services to provide home repair services to residential customers served by utilities affiliated with Dominion Energy.
“This agreement with DPS is another major step forward for HomeServe. It gives us the opportunity to add a significant number of customers, policies and new partner relationships that are complementary to our existing business,” said Tom Rusin, CEO of HomeServe USA, in a statement. “We have demonstrated over the last few years that we are capable of growing our business both organically and through utility policy book acquisitions.”
After the transaction is completed, HomeServe will have expanded to service 3.6 million customers with 5.8 million repair plans in the U.S. and Canada through more than 500 municipal and utility partnerships, the company said.
The deal, which needs regulatory approvals, will close in two phases, with the portion of the business related to customers served by utilities affiliated with Dominion Energy expected to close in December. Then, subject to relevant partner agreements, the remaining portion of the business should close before Dec. 15, 2018.
In addition to the sale of the business, Dominion entered into a commission agreement that includes HomeServe USA paying a commission for the coordinated development of marketing campaigns and associated activities to further grow the business.
Dominion Products and Services, which was created about 20 years ago, handles about 52,000 home repairs a year.
“This is HomeServe’s core business and they have a long and successful track record of building strong partner relationships and providing high quality services to millions of homeowners across the U.S.,” said Scot Hathaway, Dominion’s senior vice president of commercial services, in a statement.
Dominion Energy customers who have plans will begin receiving information about the transition to HomeServe “in the near future,” according to a news release.
HomeServe already partners with Duke Energy, NextEra, American Electric Power, Westar Energy and Black Hills Corp.
“We feel HomeServe USA’s values, including customer appreciation, align well with ours. We have appropriate controls and safeguards in place in the agreement to help ensure that customers receive the level of service they have come to expect,” a Dominion Energy spokeswoman said.