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Southern offloading Pivotal Home Solutions to American Water
Posted on Thursday, 12 April 2018 10:54
American Water Works, through its American Water Enterprises (AWE) subsidiary, is picking up Pivotal Home Solutions from Southern Company Gas for USD 365.00 million in cash, including around USD 7.00 million in debt. Founded in 1992, the target offers home warranty plans across 18 US states, covering appliances, heating and cooling systems, and lines in and around a house. The insurer, which currently has around 1.20 million customer contracts, will retain its name after the transaction. Completion is expected by the second quarter of 2018, subject to certain conditions, including approvals from the relevant regulatory bodies. American Water was established in 1886 and claims to be the largest and most geographically diverse publicly-traded water and wastewater utility company in the US. Its 6,900 employees serve around 15.00 million customers in 46 states, as well as in Ontario, Canada. President Susan Story said the purchase “provides a strong platform for long-term and capital-light organic growth”. Her counterpart at AWE, Deborah Degillio, stated that, “coupled with our existing homeowner services portfolio”, which has around 1.80 million existing contracts, the transaction will nearly double customer contracts across the US. Degillio added: “This acquisition also creates a tremendous opportunity from a product line perspective and for cross-selling our core water and wastewater products.” Following closing, Pivotal Home Solutions will become part of the buyer’s home warranty business but remain headquartered in Naperville, Illinois. Atlanta, Georgia-based Southern Company Gas was known as AGL Resources until the vendor was renamed after energy giant Southern’s USD 12.00 billion takeover in 2016. Zephyr, the M&A database published by Bureau van Dijk, shows this is one of the top ten deals targeting a direct property and casualty insurance carrier announced worldwide since January 2018. At USD 15.30 billion, the largest such transaction by far was AXA’s all-cash bid for Bermuda-incorporated XL Group. The French insurer claims the takeover will create the number one property and casualty commercial lines insurance platform. © Zephus Ltd