Repair services firm HomeServe is set to acquire Veolia Environnement's 51% share of Domo SA, giving HomeServe 100% ownership, for a consideration of £83m.
The two firms have also agreed a long term marketing agreement which allows for continued use of Veolia's brands by Domo in France.
Domo SA, a provider of insured home emergency policies, generated an aggregate profit after tax for the year ended 31 March 2011 of £11.3m. Gross assets at 31 March 2011 were £53.7m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The consideration will be paid in cash at completion and will be funded through existing bank facilities. Domo's revenues and profits are weighted to the final part of the financial year, where it is expected to generate around 45% and 60% of its revenues and operating profits respectively in the final four months of the year ended 31 March 2012. The transaction is expected to be earnings accretive in its first full year.
Richard Harpin, group chief executive of HomeServe said: "This agreement will also enable us to continue our important trading relationship with Veolia in France through our new long term marketing agreement in addition to our agreements in the UK and our testing with Veolia Aqua in Italy."
NR
