HomeServe Appoint Katrina Cliffe and acquires eLocal Holdings LLC for c. $140m

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HomeServe plc (LON: HSV), the international home repairs and improvements business, has announced the appointment of Katrina Cliffe as Senior Independent Director.

Katrina replaces Stella David. In its FY19 Annual Report, HomeServe reported that Stella would reach the end of her third term as a Non-Executive Director in November 2019 and that, having consulted with shareholders, it had been agreed that she would be appointed for a final three year term from November 2019 but as she would no longer be considered independent, would step down as Senior Independent Director. Stella will continue as Chair of the Board’s People Committee.

Katrina has served as a Non-Executive Director of HomeServe since May 2017 and is Chair of the Remuneration Committee. She is currently a Non-Executive Director of Cembra Money Bank AG, London and Country Mortgages Limited and Majestic Wine plc.

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.

The company has also 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.”