Advent International has agreed to sell Domestic & General to CVC Capital Partners. Financial terms weren’t announced. Company management is also investing. U.K.-based Domestic & General provides extended warranty plans for white and brown goods, and central heating installations. Goldman Sachs advised Advent while Jamiesons provided financial advice to company management.
August 13th 2013, London – Advent International, one of the largest and most experienced global firms dedicated solely to private equity, today announced that it has agreed to sell Domestic & General (“D&G”), a leading European provider of extended warranty plans for white and brown goods, and central heating installations to funds advised by CVC Capital Partners, in partnership with the existing management team.
Since acquiring the business through a public-to-private transaction in December 2007, Advent has worked alongside the original management team to increase revenues, expand D&G’s presence in continental Europe and introduce new products. Under Advent’s ownership EBITDA has increased from £41 million in FY 2008 to £83 million in FY 2013 (which ended 31st March), while the number of appliances covered has grown to 22 million across the UK, Europe, Australia and New Zealand. Approximately one-quarter of D&G’s £600 million in annual sales now comes from overseas. D&G’s sales and profitability, which have continued to grow despite the global economic downturn, have been driven by improved customer service, an increase in contract renewals by existing clients and customers and a number of new key client wins in the UK.
D&G was founded in 1912, expanded successfully in the UK, and became fully listed on the London Stock Exchange in 1988 before being taken private by Advent in 2007. Today, the company is focused on providing comprehensive product protection services for many UK and international brands, including many major manufacturers, retailers and financial services clients – as well as providing peace of mind to appliance owners. It employs approximately 2,500 staff and has UK office locations in Bedworth, Brighton, Nottingham and Wimbledon.
John Singer, Partner, Advent International, said: “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. The company has also forged client relationships outside the UK, enabling it to develop into a true European market leader. It is now well positioned to maximise the potential that exists within the extended warranty market under its new ownership by CVC Capital Partners.”
John Pearmund, Chief Executive Officer 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.”
Completion of the transaction is subject to customary regulatory clearances and is expected to take place during Q4 2013.
Advent was advised on the transaction by Freshfields (legal), Goldman Sachs (M&A), Marlborough Partners (debt advisory), PwC (financial and commercial due diligence) and EY (tax due diligence). Management was advised by Macfarlanes (legal) and Jamiesons (financial advice).
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global investors dedicated solely to private equity. Since inception, the firm has invested in more than 280 buyout transactions in 36 countries, achieving over 230 full or partial exits and today has €25.3 billion in assets under management. With offices on four continents, Advent has established a globally integrated team of over 170 investment professionals across North America, Europe, Latin America and Asia. The firm focuses on growth and traditional buyout and strategic repositioning transactions across five core sectors, including business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecoms. After 29 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for portfolio companies.