Acquisition

HOMESERVE PLC

ACQUISITION OF eLOCAL

LONDON - 19 November 2019 - HomeServe plc ("HomeServe"), the international home repairs and improvements business, has agreed to acquire 79% of eLocal Holdings LLC for c. $140m on a "debt free, cash free" basis. eLocal is a fast-growing Home Experts business whose mission is to connect consumers with local businesses. The acquisition of a majority stake gives HomeServe a profitable entry to the Home Experts market in North America.

In calendar year 2018, eLocal generated profit before tax of $5.3m, which is expected to rise to c.$9m in 2019 following an acquisition and strong organic growth. At 31 December 2018, eLocal had net assets of $10.4m and gross assets of $14.2m.

In HomeServe's financial year ending March 2020, eLocal is expected to add c.$5m to adjusted operating profits (c.£2m at PBTA level), rising to c.$16m in FY21 after further investment (c.£6m PBTA). HomeServe will continue to invest in eLocal to scale and grow its Home Experts business in North America, while continuing to deliver high single digit profit growth.

The c.$140m on a "debt-free, cash-free" basis will be satisfied through HomeServe's existing debt facilities. The transaction is anticipated to close in December 2019, subject to US competition clearance (Hart-Scott-Rodino). HomeServe has options in place to acquire the remaining 21% of eLocal over time.

The vendors of the stake, and owners of the remaining 21% of eLocal, include the management team and LLR Partners, who first invested in the company in 2017. Founders Bruce and Andy Aronow will stay with the business and work closely with HomeServe Founder and CEO Richard Harpin.

Richard Harpin, Founder and CEO of HomeServe, said: "We are delighted to have agreed to buy a majority shareholding in eLocal. Bruce Aronow and team have created a really successful business model with great growth potential. I am looking forward to working with them as we continue to grow our Home Experts business."

Bruce Aronow, Founder and CEO of eLocal, added: "The entire eLocal team is extremely excited to have been chosen as the platform to build the Home Experts business in the US. Partnering with a global leader like HomeServe will provide us the ability to leverage our talented team and best in class technology to deliver a great product to consumers in the US." 

Forward Looking Statements

This report contains certain forward looking statements, which have been made in good faith, with respect to the financial condition, results of operations, and businesses of HomeServe plc. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements. The statements have been made with reference to forecast price changes, economic conditions, the current regulatory environment and the current interpretations of IFRS applicable to past, current and future periods. Nothing in this announcement should be construed as a profit forecast.

About HomeServe

HomeServe is an international home repairs and improvements business which provides people with access to tradespeople and technology to make home repairs and improvements easy. HomeServe is listed on the London Stock Exchange, with a market capitalisation of £4.0 billion.

ENDS