Direct Energy, one of North America’s largest competitive energy and energy-related services companies, has agreed to acquire AWHR from MWHR, a U.S. based investment entity, for $30 million in cash plus working capital.
Headquartered in Canonsburg, Pennsylvania, AWHR is the largest independent water heater rental business in the U.S. and provides rentals, as well as related repair and maintenance services, to 80,000 residential customers located principally in the Midwest, Florida and U.S. Northeast. Direct Energy is a leading provider of water heater rental services in Ontario, Canada, where it currently has 1.1 million customers.
The AWHR business model, customer footprint and operations have a strong overlap with Direct Energy’s existing services business. The acquisition provides Direct Energy Services with an expanded product range and the opportunity to grow its customer base further in the U.S. – offering water heater and HVAC rental and leasing alongside heating, air conditioning, plumbing and electrical services across its growing North American franchise business.
Badar Khan, president and CEO of Direct Energy, said: “The acquisition of AWHR presents us with a unique opportunity to grow Direct Energy’s customer base through a combination with our existing home services operations and expertise in water heater rental services. We will also benefit from operational efficiencies and expanded capabilities, as we seek continued growth in North America with the aim of doubling the profitability of Direct Energy’s North American downstream business over the next 3-5 years.”
In 2010, Direct Energy acquired Florida-based Clockwork Home Services to become the largest provider of heating, cooling, plumbing and electrical services in North America, serving more than three million residential customers annually. The Clockwork network includes the Benjamin Franklin Plumbing®, Mister Sparky®, and One Hour Heating & Air Conditioning® brands. Direct Energy acquired Home Warranty of America, a leading supplier of whole home protection plans across the U.S., in 2012 to complement its existing energy and services business and enhance its ability to offer comprehensive protection plans to customers.
“As the leader in U.S. energy and services, we are excited to add AWHR’s capabilities to our already broad suite of home services and solutions,” said Scott Boose, president of Direct Energy Services. “This deal will significantly bolster our services offering and ability to provide customers across the U.S. with more competitive home services options.”
The transaction is expected to close this year.