Centrica plc is to sell Clockwork, Inc., and certain of its affiliates (Clockwork) in North America to Authority Brands, a home services franchise platform backed by funds advised by Apax Partners for $300 million (£230 million).
Clockwork consists of over 725 franchise territories, and 10 company-owned stores, and brands including One Hour Heating & Air Conditioning®, Benjamin Franklin Plumbing®, Mister Sparky® electric, BuyMax, Success Academy and SuccessWare 21.
The disposal is in line with Centrica’s intention to drive channel and brand rationalisation across the Group, with a continued focus on the efficiency and effectiveness of those channels and Centrica’s ability to offer a range of energy and services propositions through them. The Company retains a material home services business in North America and will continue to target growth in its home protection plan and home warranty offers sold under its own brands. Centrica acquired Clockwork in 2010 for $183 million and the sale price represents an attractive multiple of Clockwork’s 2018 EBITDA.
Iain Conn, Group Chief Executive, Centrica plc said:
“The disposal of the Clockwork portfolio is aligned with our intention to drive channel and brand simplification across the Group focusing on our owned channels and is the first part of our £500 million divestment programme of non-core assets we announced today alongside our 2018 Preliminary Results. We will continue to drive capital discipline and returns across our portfolio.”
Mark Hodges, Executive Director and Chief Executive, Centrica Consumer said:
“Clockwork has been a good business for Centrica since its acquisition in 2010. However, with Centrica’s focus on building ongoing customer relationships, it makes sense now for us to sell the business and focus on continuing to deliver growth through protection plan and home warranty offers. I am pleased we have found a good home in Authority Brands and wish the Clockwork business and its franchisees the best for the future.”
Ashish Karandikar, Partner at Apax Partners, said:
“We are delighted to support Authority Brands with this transformational acquisition. The Clockwork brands operate in attractive markets and will bring scale and diversification to Authority Brands’ platform.”
The sale is expected to close in the first half of 2019 and is subject to approval by U.S. competition authorities under the Hart Scott Rodino Act.