Riverside Acquires The Dwyer Group

NEW YORK - The Riverside Company, a private equity firm with offices in New York, Cleveland, Dallas, and San Francisco, announced the acquisition of the Dwyer Group, a holding company that owns six franchise businesses, including Aire Serv® Heating & Air Conditioning and Mr. Rooter®.

The Dwyer Group, headquartered in Waco, Texas, was formerly a public company traded on Nasdaq. With the approval of a majority of the outstanding shares of Dwyer's common stock, the company has now become privately held by Riverside and other stockholders, including members of the Dwyer family and Dwyer's senior management. Currently, Dwyer supports approximately 800 franchisees in the United States and Canada, as well as approximately 275 franchisees in 15 other countries through its master licensees.

The company's franchisees currently service over 2 million homes and businesses per year and generate over $400 million in annual retail sales. According to the company, over the past five years, Dwyer's revenues have grown by a compounded annual rate of 19 percent.

The company was founded in 1981 by Don Dwyer, and it went public in 1993. In January 1999, Don's daughter Dina Dwyer-Owens took over as CEO of the company.

Riverside paid $6.75 per share to Dwyer's public stockholders who were not participating in the management buyout, which represented a premium of approximately 59 percent over the $4.25 closing price on May 9, 2003, the last trading day before the announcement of the transaction.

Public To Private

"We've been eyeing small public companies for some time as a possible source of attractive acquisitions," commented Stewart Kohl, managing general partner at Riverside.

"The rate of public-to-private transactions has been slower than we expected, with just 70 in 2002 and 77 in each of 2001 and 2000, according to Mergerstat Review. But we do anticipate this number increasing significantly."

"Dwyer has an industry-leading management team that has been remarkably successful in developing a sound franchise system in which the franchisees consistently grow their businesses year over year," said Loren Schlachet, a Riverside principal based in the firm's San Francisco office.

Doyle James, the president of Aire Serv, told The News, "The announcement with Riverside will let us take a long-term approach to the business, rather than a quarterly focus. It's going to give us a much-accelerated ability for our sales staff to bring on new franchise owners.

"We've already increased our support staff in anticipation of the acquisition, and we expect to double our sales team in the first quarter of next year. We're also continuing to expand on our software initiative. It has really positioned us to be a major player in the business going forward."

Publication date: 11/10/2003

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