Homeserve Buys Help-Link To Combine Heating Installations And Repairs

LONDON (Alliance News) - Homeserve PLC on Tuesday said it has agreed to acquire Help-Link UK ...

Alliance News | 1 August, 2017 | 8:38AM

LONDON (Alliance News) - Homeserve PLC on Tuesday said it has agreed to acquire Help-Link UK Ltd to "create a new UK-wide home heating business" that brings together installations, servicing and repairs.

Help-Link's ultimate beneficial owner is NorthEdge Capital, but Homeserve expects to fully acquire the company from administrators "in the coming days". The acquisition is subject to the appointment of administrators from Ernst & Young LLP over Help-Link's immediate holding companies.

A total of GBP5.0 million will be paid in cash to the administrators.

From completion, Help-Link also will have payment obligations under prior loan notes issued by it to NorthEdge Capital of up to GBP15.9 million, the payment of GBP15.5 million of which is based on the trading performance of Help-Link in the three years following completion. In addition, HomeServe will settle GBP1.8 million of Help-Link's bank overdrafts at completion.

"The acquisition is expected to be marginally earnings accretive for HomeServe in the 2019 financial year," said the company. "On completion, Help-Link's people, management and headquarters in Leeds will become part of HomeServe's UK network."

Homeserve's financial year runs until the end of March.

Help-Link is a leading player in the UK domestic boiler installation market. Founded in 1989 and based in Leeds, the company has over 250 employees including 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.

"Of the one million homeowner boiler installations in the UK every year, the vast majority are undertaken by local and regional tradesmen. There is 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," said HomeServe Chief Executive Martin Bennett.

"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," he added.

HomeServe said Help-Link, since 2015, has been in a turnaround process following the end of the 'ECO' market for subsidised boiler installations, which precipitated a significant downturn in installation volumes.

In the year to the end of March 2016, Help-Link generated revenue of GBP30.9 million to deliver a pretax loss of GBP15.3 million, with gross assets at the end of the year valued at GBP3.5 million.

For comparison, the loss before interest, tax, depreciation and amortisation in that year was GBP9.7 million, but that narrowed significantly in the year to the end of March 2017 to GBP3.8 million, with the expectation for "marginally positive" Ebitda in the current year to the end of March 2018.

Homeserve shares were up 0.3% on Tuesday at 727.50 pence.

By Joshua Warner;; @JoshAlliance

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