Authority Brands Acquires Clockwork Inc. Companies
The transaction was completed on May 1; changes are rolling out
In a move described by backers as “transformational,” home services brand Clockwork Inc. has been acquired from Direct Energy Group by Authority Brands, a leading home services franchising platform backed by funds advised by Apax Partners.
Clockwork, established in 1999, is composed of three brands: Benjamin Franklin Plumbing, One Hour Heating & Air Conditioning, and Mister Sparky Electric.
Authority Brands is compiling a portfolio of home service franchises. The acquisition brings the number of brands up to seven, alongside The Cleaning Authority, Homewatch CareGivers, America’s Swimming Pool Co., and Mosquito Squad. It also doubles Authority Brands’ overall system revenue to over $1 billion, according to Rob Weddle, CEO.
“[Authority Brands] is looking for companies, within a particular field of business, that are ranked or rated in the top three within their respective field,” said Rich Yohn, senior vice president at Clockwork Brands. According to surveys in Entrepreneur magazine and Franchise Times, Clockwork met that qualification for HVAC, plumbing, and electrical.
“They saw that the acquisition of us fits both what they’re trying to do in expanding their portfolio and also their criteria or threshold that they’ve set: that we have the reputation, customer service … that we’re a beneficial asset that they could roll into their portfolio,” Yohn said. “Direct Energy was an energy company that happened to have a franchising arm. [Authority Brands] is a franchising company. We’re in their sweet spot, they are in our sweet spot; it’s a great marriage.”
Clockwork’s three brands will remain unified under the Clockwork name, as a suite of brands under the umbrella of Authority Brands. Homeowners who call Clockwork for repairs can expect to see the same yellow One Hour trucks, blue Benjamin Franklin trucks, and red Sparky trucks pull up outside their homes — and the same technicians and franchisees.
“The decision for this sale reflects our goals to focus and simplify our channels to customers and to own our own brands,” said Bruce Stewart, president of Direct Energy Home North America. “Authority Brands is a good home for Clockwork, and the franchise owners and customers will see no difference in our service delivery as we conclude this transaction.”
What those in the Clockwork sphere will notice, said Yohn, is an increased focus on communication, both with franchisee contractors and with homeowners (worked with indirectly through the franchisee). One focus is mobile platforms — “really driving people into the 21st century,” Yohn said.
“In the old days, all you needed was a Yellow Pages ad. I don’t even know if the Yellow Pages still exists,” Yohn said. “It’s very easy, in the contractor world, to go ‘My dad did it this way, my grandfather did it this way,’ and kind of get stuck in a rut. As people become savvy, and as they communicate in a myriad of different ways, the one thing you don’t want to do is make it clunky. You’ll lose the consumer over the long term. So it’s about understanding the way consumers now want to book appointments, and also the way that the contractor goes to the customer. It’s no longer dragging along a great big book; everything’s done on the tablet … in such a way that you can reach the millennial, the Gen Xer, the boomer, the WWII generation. It’s the enhancement of technologies.”
The acquisition closed May 1, and changes are already being rolled out.
“We’re not sitting back,” Yohn said. “It’s ‘let’s get to work’ to enhance the experience, both for the franchisee contractor and for the homeowner. There’s no sitting around thinking about things. This is a company of action.”
Looking forward, Yohn expects the changes made during the acquisition will help Clockwork contractors provide an even smoother process for homeowners.
“We are in a field where people don’t really want to call for help — they have to,” he said. “And in those situations, providing smooth transitions from taking a call, booking it, and then providing on-time service, all make for a happier end. Our franchisees or contractors will receive more benefit as this experience is enhanced. The cost to acquire a customer always exceeds the cost to maintain a customer.”
Apax Partners, Authority Brands’ London-based private equity partner, has a global portfolio of companies with resources that can be brought to bear, Yohn added.
“If you want to enhance a website, we’ve got a company that can do that,” he said. “You want to work with marketing, we’ve got a company that can do that. There’s so many more resources that become available through this partnership. That’s what’s exciting for me.”
Ashish Karandikar, partner at Apax Partners, referred to the acquisition as a transformational event.
“The Clockwork brands operate in attractive markets and will bring scale and diversification to Authority Brands platform,” he stated. “We anticipate substantial benefits for both businesses from cross-selling and collaboration across marketing, technology, and operational support.”
Publication date: 7/1/2019