Centrica plc today announced that Direct Energy, its North American subsidiary, has acquired Residential Services Group Inc. (RSG), a U.S. based home services business, for a total consideration of $150 million (£83 million) in cash.
RSG is a leading independent provider of plumbing and HVAC (heating, ventilation and air conditioning) installations and of maintenance services to homebuilders and homeowners. The locations of its primary operations include the states of Texas and Ohio, where Centrica currently has over one million energy customers. It also has a presence in a number of other states which may provide energy growth opportunities in the medium term.
For the 12 months ended 31 July, 2004, RSG recorded sales of $308.6 million (£171 million) and EBITA of $24.4 million (£13.5 million). The company currently employs approximately 2,000 staff and completes more than 200,000 service calls, and installs over 50,000 new systems, per annum. The acquisition is expected to be earnings enhancing in its first full year.
The acquisition gives Centrica an opportunity to replicate its successful UK model by cross-selling home services to its current customer base, which will reduce churn. It will also enhance organic growth potential by strengthening Centrica’s overall customer proposition.
Sir Roy Gardner, Chief Executive of Centrica said: "Acquiring an established home services business enables us to strengthen our position in Texas and Ohio by replicating our success in the UK and Ontario in creating value by deepening customer relationships.
"In RSG we are acquiring a first class management team which has also built a profitable customer base across a number of states, in which there may be opportunities to cross sell energy in the future."