Insider Media Limited

Who?
HomeServe, the Walsall and Nottingham home insurance and emergency repair provider.

Did what?
Has this morning announced a further expansion of its US business with the acquisition of National Grid Energy Services’ (NGES) service contract business for a consideration of £9m.

What does this mean?
NGES is a subsidiary of National Grid USA, one of the largest utilities in the US, serving 6.7 million customers including more than 5 million residential households. The consideration, which was reduced by £10m due to net liabilities, will be funded from existing facilities. HomeServe’s US subsidiary, Home Service USA, has also entered into a marketing agreement with National Grid USA to use the National Grid Energy Services name. In the year to 31 March 2009, the contract business generated pre-tax profit of £4m and as at 30 September 2009 had gross assets of £4.5m.

Richard Harpin, chief executive of HomeServe, said: “This represents a significant step forward in the development of our US operations and reflects our strategy of expanding our international businesses through a combination of organic growth delivered by additional affinity partnerships and selective acquisitions.” 

Insider comment:
Completion of the transaction is expected to take place within 120 days.

The marketing agreement with the National Grid USA will give Home Service USA access to more than 5 million households across the National Grid's US service areas, increasing its footprint of affinity partner households in the US to more than 15 million.

HomeServe recently announced plans to make acquisitions in Italy, more specifically in Milan. It is also planning to set up joint ventures with Italian companies in the tertiary sector.