CVC Capital to buy UK’s Domestic & General for $1.2 bn
14 Aug 2013
European private equity firm CVC Capital Partners, yesterday agreed to buy Britain's home-appliance warranty provider Domestic & General Group Ltd from peer Advent International, for a reported £750 million ($1.2 billion).
Both firms did not reveal the financial terms of the transaction, but several media reports said that CVC paid £750 million and Domestic & General's management will retain a stake in the company.
Advent had acquired Domestic & General just before the onset of the global financial crisis in 2007 for £524 million and was seeking as much as £1 billion for the Bedworth-based 101-year-old company.
Advent was forced to accept £750 million after talks with other bidders like Blackstone Group and Clayton, Dubilier & Rice collapsed.
Domestic & General was founded in 1912 and listed on the London Stock Exchange in 1988 before being taken private by Advent in 2007.
The company provides product protection services for many UK and international home appliance brands, including many major manufacturers, retailers and financial services clients.
It employs approximately 2,500 people and has UK office locations in Bedworth, Brighton, Nottingham and Wimbledon.
Under Advent's ownership EBITDA had increased from £41 million in 2008 to £83 million in 2013, while the number of appliances covered has grown to 22 million across the UK, Europe, Australia and New Zealand.
Approximately one-quarter of Domestic & General's £600 million in annual sales now comes from overseas.
''Over the last six years, we have greatly enjoyed working with the management team of D&G to deliver strong performance both at home and abroad and significantly expand its international breadth. By improving the customer retention rates and cross-selling of products, we have helped accelerate D&G's strong UK growth,'' said, John Singer, partner at Advent.
John Pearmund, CEO of Domestic & General, said, ''Thanks to the strategic and operational improvements that we have made with Advent's support, we have grown considerably in recent years. Carrying out the next phase of our business plan is a great opportunity for D&G, our employees, clients and customers as we look to continue our strategy of maintaining sustainable growth momentum in the UK together with international expansion.''
