Direct Energy to Acquire Home Warranty of America

Direct Energy has reached an agreement to acquire Home Warranty of America (HWA), a supplier of whole home protection plans across the United States, for $48 million (£30 million) in cash.

Headquartered in Buffalo Grove, Illinois, HWA provides whole home warranty services directly to customers and through a national network of real estate agents, insurance professionals, relocation companies, developers, title companies, bankers, home inspectors, and mortgage brokers.

The acquisition of HWA provides Direct Energy with a national platform to build and grow an extensive protection plan business in the U.S., offering customers a range of products including heating, air-conditioning, plumbing and electrical cover.

HWA has over 70,000 customers with high value whole-home warranty plans, a national network of 4,000 contractors, an established national sales force, call center, and information systems.

"With the necessary capabilities and licenses to operate in all 50 states, HWA's comprehensive service delivery network, enterprise software and call center will support Direct Energy's continued growth as North America's largest home energy service provider," the companies said.

"The further expansion of our Services business is an essential component of our North American growth strategy," said Chris Weston, President and CEO of Direct Energy. "Direct Energy Services is already a leader in the Canadian home protection plan market, and the acquisition of HWA will accelerate Direct Energy's access to the US market and its huge growth potential."

The addition of HWA will complement the current on-demand business of Direct Energy subsidiary Clockwork Home Services, enhancing Clockwork's ability to offer protection plan cover to its substantial customer base. "It will make Direct Energy the first major provider in North America to offer the dual capability of home energy services and protection plan products, replicating the market-leading model developed by British Gas in the UK," Centrica said.