Direct Energy acquires Home Warranty of America (HWA)

Direct Energy has acquired the Illinois-based home protection plan business Home Warranty of America (HWA) for $48 million (£30 million) in cash.

Centrica plc's North American subsidiary, Direct Energy, has acquired the Illinois-based home protection plan business Home Warranty of America (HWA) for $48 million (£30 million) in cash.

The acquisition of HWA provides Direct Energy with a national platform to build and grow an extensive protection plan business in the US, offering customers a range of products including heating, air-conditioning, plumbing and electrical cover.

HWA is one of the few providers with the necessary licenses to operate nationwide across the United States. It has over 70,000 customers with high value whole-home warranty plans, a national network of 4,000 contractors, an established national sales force, call centre and information systems, as well as industry-leading service delivery capability.

Last year Direct Energy acquired Clockwork Home Services, making it the leading energy services company in North America, with 3 million customers. The addition of HWA will complement Clockwork's current on-demand business, enhancing its ability to offer protection plan cover to this substantial customer base. It will make Direct Energy the first major provider in North America to offer the dual capability of home energy services and protection plan products, replicating the market-leading model developed by British Gas in the UK.

Chris Weston, President and CEO, Direct Energy, said: "The protection plan market in North America is relatively immature. The addition of HWA provides Direct Energy with the capability to be the first national home services player that can offer dependable, peace of mind home cover delivered 24 hours a day through our highly trained technicians. This will accelerate Direct Energy's access to the US market and its huge growth potential. HWA also offers a strong fit with our strategic priority of creating an integrated North American business."




Home Warranty of America is a privately owned provider of ‘whole home' warranty products, headquartered in Buffalo Grove, Illinois.

The transaction is subject to regulatory approval and other customary closing conditions, and is expected to close in the first quarter of 2012.

The transaction will be made through Centrica plc's wholly owned subsidiary RSG Holding Corp.