Direct Energy Deal for Clockwork to Create New Giant in Residential Services

June 18, 2010
Energy service provider Direct Energy, a subsidiary of U.K.-based energy company Centrica plc, has agreed to buy the assets and business of Clockwork

Energy service provider Direct Energy, a subsidiary of U.K.-based energy company Centrica plc, has agreed to buy the assets and business of Clockwork Home Services, Sarasota, Fla., for $183 million. Clockwork, through a combination of directly owned and franchise-based units, including Mister Sparky electrician services, will combine with Direct Energy to form the largest provider in North America of home heating and cooling, plumbing and electrical services.

Together, the new organization will have overall revenues, including independent franchise and affinity clients, of almost $4 billion. The combined organization will operate in almost every U.S. state and Canadian province providing repair and maintenance services to customers' heating and cooling systems as well as energy-efficiency related services to homes and businesses through Clockwork's franchised and owned operations, which include One Hour Heating and Air Conditioning, Benjamin Franklin Plumbing and Mister Sparky.

“The addition of Clockwork Home Services to our Services business helps deliver on Direct Energy's growth strategy of being North America's leading integrated energy and services company,” said Chris Weston, president and CEO of Direct Energy. “This acquisition will also allow us to increase the proportion of households that Direct Energy serves where we can offer both services and energy supply from 30 percent to 55 percent, with the opportunity to increase our integrated offerings through new Clockwork franchises.”

Clockwork's brands and customer management systems will complement Direct Energy Services' maintenance and service plan offering and market leadership in Canada. The new organization will also focus on obtaining state, provincial and federal energy-efficiency funding that is widely available to help make North American homes more energy efficient, the companies said.

“Direct Energy's five million customer relationships in North America and access to capital markets is critical to ensure the continued growth and investment in Clockwork's highly successful brands and franchises,” said Jim Abrams, CEO of Clockwork Home Services. “I am committed to personally ensuring a cornerstone of the combined organization continues to be helping owned-operations, franchises and affinity clients rapidly expand their businesses.”

Centrica is a large integrated electric and gas company operating primarily in the U.K. and North America. Its activities include gas and oil exploration and sourcing, electric power generation including offshore and onshore wind farms and nuclear plants, energy storage and trading, commercial, industrial and residential gas and electricity sales and offering home energy solutions and services. Among Direct Energy's U.S. brands are Airtron, CPL Retail Energy and WTU Retail Energy.