Domestic & General sold on for £750m


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The Independent Online

Domestic & General, the company behind extended warranties on millions of electrical appliances and central heating systems, has been sold for around £750 million.

Private equity firm CVC saw off early bids from rivals Blackstone and Clayton, Dubilier & Rice to acquire the business from Advent, another private equity group, which had originally put a £1 billion price tag on the company.

Domestic & General provides cover on around 22 million appliances in 15 million homes primarily in the UK but also in nine other European countries, as well as New Zealand and Australia.

The company was founded in 1912 and listed on the stock market in 1988. It was eventually taken private by Advent when the private equity firm outbid Domestic & General’s competitor, Homeserve, with a  £524 million takeover offer in 2007.

Advent declined today to say what scale of return it had made on its investment, which suggests that it may not have been one of its most successful private equity flip sales. There were suggestions that it may have taken a sizeable final cash dividend out of Domestic & General ahead of the sale, which would have pushed up the business’s debt.

Advent said that under its six-year ownership Domestic & General’s sales had virtually doubled to  £600 million a year, while headline earnings had risen from £41 million in 2008 to £83 million in the year to March 2013.

The company employs around 2,500 people, with offices in Wimbledon, Brighton, Nottingham and Bedworth. Existing management, led by chief executive John Pearmund, continue to have a stake in the business after today’s deal.