Clockwork Home Services Sold to Direct Energy
June 11, 2010
Direct
Energy, an integrated energy and services company in North
America and a subsidiary of Centrica plc, announced on June 10 its
intention to acquire the assets and business of Clockwork Home Services, Inc.
for $183 million. The transaction, which remains subject to certain customary
conditions including approval by regulators in the United States and Clockwork’s
shareholders, is expected to be completed by July 1, 2010.
Direct
Energy Services and Clockwork Home Services will combine to become the largest
provider of heating and cooling, plumbing and electrical services to more than three
million households annually in North America.
“The
combination of Direct Energy and Clockwork Home Services brings together two of
the strongest and best home services businesses in North America to create the
category leader with network revenues of almost $4 billion. With our size and
coverage across virtually every state and Canadian province, we will transform
the home services [HVAC, plumbing, electrical] industry to bring homeowners’ exceptional
customer service and value,” said Eddy Collier, president, Direct Energy
Services.
Jim
Abrams, CEO of Clockwork Home Services said, “This has been in process for a
little while now, so we are very excited to announce the combining of our two
great companies. Clockwork has had substantial growth over the last decade, and
we have been successful in executing our long-term business plan of moving
contractors from affinity groups into franchises. Our three franchise brands
are now the fastest growing brands in North America
for technical home services. Combined sales of One Hour Heating and Air Conditioning®, Benjamin
Franklin Plumbing® and Mister Sparky® is approaching half a billion
dollars.
“Capital was the great constraint for us
going forward. Eddie Collier engaged me late last year in conversation to
ensure the continued great growth of both our companies. Direct Energy brings
us access to customers, capital, and sophisticated management that will help us
continue to grow. Their knowledge of home services agreements is much stronger
than ours, so we are very excited for the future. Our franchisees and employees
have been very supportive as we began notifying them of the change,” said
Abrams.
Collier said, “We are incredibly
thrilled because we have 8.5 million service agreements in the United Kingdom
(UK). and would very much like to see the North American market move in that
direction. We feel that with Clockwork’s presence in this market, we are
ensured of tremendous success.”
“The addition of Clockwork Home Services to our services business helps
deliver on Direct Energy’s growth strategy of being North
America’s leading integrated energy and services company,” noted
Chris Weston, president and CEO, Direct Energy. “This acquisition will
also allow us to increase the proportion of households that Direct Energy
serves where we can offer both services and energy supply, with the opportunity
to increase our integrated offerings through new Clockwork franchises.”
The combined organization will operate in almost every state and
Canadian province, providing repair and maintenance services to customers’
heating and cooling systems as well as energy efficiency related services to
both homes and businesses. Clockwork’s brands, customer service and customer
management systems complement Direct Energy Services’ strong maintenance and
service plan product offering and market leadership in Canada. Direct Energy has 8.5
million service agreements in place in the UK. The new organization will also
focus on obtaining state, provincial and federal energy efficiency funding that
is widely available to help make North American homes more energy efficient.
According
to Abrams, One Hour Heating and Air Conditioning, Benjamin Franklin Plumbing,
and Mister Sparky franchisees and owned operations, and Clockwork’s affinity
clients will benefit from Direct Energy’s experience in the home services
industry as well as the financial support and UK energy services market expertise
of its parent company, Centrica plc.
“Direct
Energy’s five million customer relationships in North
America and access to capital markets is critical to ensure the
continued growth and investment in Clockwork’s highly-successful brands and
franchises,” said Abrams. “I am committed to personally ensuring a cornerstone
of the combined organization continues to be helping owned-operations,
franchises, and affinity clients rapidly expand their businesses.”
The
Clockwork affinity client groups include: Plumbers’ Success International®,
AirTime 500®, and Electricians’ Success International®.
“Huge
benefits to our affinity members will become available,” said Abrams. “For
example, our combined purchasing power will open up many new opportunities. The
shared technology that will be driving our business will also benefit our
affinity members. Some of our largest affinity members, who did not wish to
become franchises, still had strategic needs that were not necessarily being met,
such as long-term exit strategies. Such opportunities will now open up with the
increased capital strength of our company, and it also opens up many more
customer development opportunities.”
To further build North American awareness of One Hour Heating and Air
Conditioning, Benjamin Franklin Plumbing and Mister Sparky, Clockwork appeared
on NBC’s Celebrity Apprentice with Donald Trump on May 2nd. Celebrating
its appearance, Clockwork is currently running a sweepstakes called “Trump Time
is Money” at www.win100grand.com as well as a national advertising campaign.
