HomeServe share price up after company announces $75m deal to take "largest single step" in US expansion

 
William Turvill
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HomeServe said the deal would expand its footprint by 9.4m households (Source: Getty)

HomeServe's share price rose this morning after it announced a deal to take its “largest single step” in US expansion.

The home repairs business announced this morning it has agreed to acquire Utility Services Partners (USP) for $75m (£52.2m) in cash on a "debt free cash free" basis at completion.

It said the deal would increase its footprint by 9.4m households.

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Founded in 2003, Pennsylvania-headquartered USP is a provider of home assistance service line repair contracts in the US and Canada.

If completed, HomeServe said the deal would take its footprint of partner households in the US to more than 40m.

For the year to 31 March 2015, USP reported turnover of $30.9m and adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) of $2.7m.

Read more: HomeServe fixes up £26.2m profit for 2015 half year results

HomeServe said that in 2018, the first full year of ownership, it expects Ebitda to be enhanced by around $15m.

HomeServe group chief executive Richard Harpin said the US now accounts for one third of the company's customers.

He added: “This is the largest acquisition that we have made since entering the US market in 2003 and will accelerate our growth, both in the US and the group."

HomeServe's share price closed at 425.6p yesterday. This morning, after the deal was announced, it rose as high as 436p - up more than two per cent.

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