Home repairs and improvements business HomeServe is to buy a boiler installation specialist in Leeds for £5 million.
UK-wide home heating business, bringing together installations, servicing and repairs.
The deal values the Help-Link business at up to £22.7m.
Martin Bennett, chief executive 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 a 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.”
Help-Link’s ultimate 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 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.
From completion, Help-Link will have certain payment obligations under prior existing loan notes issued by it to NorthEdge Capital 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.
On completion, Help-Link’s more than 250 employees, management and headquarters in Leeds will become part of HomeServe’s UK network.
Help-Link, founded in 1989, is a leading player in the UK domestic boiler installation market with 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, which precipitated a significant downturn in numbers of installations.
For the year to the end of March 2016, Help-Link’s audited accounts showed revenues of £30.9m, a loss before tax of £15.3m and gross assets of £3.5m. For the year to March 2017, the unaudited results of the Company show the loss reducing to £3.8mmillion and in the current year to the end of March 2018, Help-Link expects a small profit.
HomeServe, which has a market capitalisation of £2.2 billion, provides a comprehensive range of water, heating, electrical assistance and repair products to 7.8m customers in the UK, North America, France, Spain and Italy.
Written by: John Corse
Source: Express & Star
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