Funds advised by CVC Capital Partners have agreed to acquire Domestic & General Group (D&G), in partnership with the existing management team, from Advent International.
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 GBP41m in FY 2008 to GBP83m in FY 2013 (which ended 31 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 GBP600m 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 has long-standing partnerships with the major appliance manufacturers and retailers, to provide consumers with extended warranty services across the full range of domestic appliances. D&G’s service covers product registration, warranty design, customer interaction, policy management, claims handling, repair administration and post-repair customer service.
John Singer, partner, Advent International, says: “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.”
Pev Hooper, partner at CVC, and Peter Rutland, senior managing director at CVC, say: "We are very pleased to be investing to acquire D&G alongside management. John Pearmund and his team have built a great business, with real long term growth potential. We look forward to working with them and using CVC’s international resources to help take D&G to the next stage of its development."
John Pearmund, chief executive of D&G, says: "We are delighted to have CVC as a partner as we enter the next phase of our company’s growth. We very much welcome the support, opportunities and resources which CVC will bring to D&G to enable us to build further on our success to date in the UK and internationally."
CVC was advised by UBS, OC&C Strategy Consultants, KPMG and Clifford Chance. Fully committed debt financing is being provided by Goldman Sachs, Barclays, Credit Suisse, BNP Paribas, Morgan Stanley, Société Générale and UBS. Management was advised by Macfarlanes and Jamieson Corporate Finance.
Completion of the transaction is subject to customary regulatory clearances and is expected to take place during Q4 2013.
