Finalized Acquisition Expected to Change Market
September 13, 2010
Direct Energy, an integrated energy and services company, and a subsidiary of Centrica plc, has completed its $183 million acquisition of the assets and business of Clockwork Home Services Inc. Following approval by Clockwork’s shareholders and receipt of U.S. regulatory approval, the combined Direct Energy Services and Clockwork Inc.® business is now considered to be North America’s largest provider of heating, cooling, plumbing, and electrical services.
“If there was ever a question about value, I believe it has been answered by this acquisition,” said Jim Abrams, CEO of Clockwork, as he discussed the finalization of the company’s acquisition.
Abrams continues as CEO of Clockwork Home Services, headquartered in Sarasota, Fla. The combined organization will operate across the United States and Canada, providing repair and maintenance services to customers’ heating and cooling systems as well as energy efficiency related services to both homes and businesses. The transaction concluded on July 1 and it is estimated by Clockwork officials that the combined sales of Direct Energy and Clockwork will exceed approximately $6 billion.
EXITS AND BENEFITSAs changes occur in the organization, it is expected that new and expanded benefits will offer different opportunities for current and future franchisees and Success Group International® members. One of these benefits is the investment in franchise initiatives. During a conference call with Abrams, it was noted that there will be increased capital resources to help expand the Clockwork franchise brands both nationwide and in Canada.
A two-fold opportunity for different exit strategies was briefly summarized as well. One such opportunity would be for current franchisees to roll their franchise into another as overlapping territories are combined. The other would be for non-franchised contractors seeking to be acquired.
“These unique acquisition opportunities will happen quickly. Circumstances such as these have only happened one other time in my 36 year career,” said Abrams. “There is a lot of capital, a lot of cash, and a lot of acquisitions to be done.”
Another improvement expected will be better pricing and rebates offered to affiliates due to the fact that Clockwork is now connected to an international company - Direct Energy. Other features will include an upgrade to the company’s Successware® platform with a safety program and customer satisfaction measurement; as well as the possibility of protection service plans.
AFFILIATION IS KEYThe new level of competition that Clockwork will bring to different markets is predicted to change some of the regional HVAC business landscape. When it comes to mom-and-pop shops, Clockwork’s CEO still felt there was a place for them in the market, but stressed that these outfits would need to be more sophisticated to compete.
“Clockwork is a game changer for those who do become affiliated,” said Abrams. “We’re going to be competing no matter what. Survival of the mom-and-pop shop will come with affiliation.”
As of yet, franchisees and affiliates are not reporting any major changes in their current markets but excitement among them is growing. “With our expanded geographical coverage, our shared expertise, and our vision for growth, we will reshape the home services market through our 5 million customer relationships and significant purchasing power,” said Eddy Collier, president, Direct Energy Services.
For more information, visit www.clockworkhomeservices.com or www.directenergy.com.
Publication date: 09/13/2010