Enercare Inc., a Canadian home and commercial services and energy solutions company, has announced a wholly-owned subsidiary of its Enercare Solutions Inc. will acquire SEHAC Holdings Corporation (Service Experts) through a merger. The $340.75 million deal, which is expected to close in the second quarter of this year, excludes transaction costs, subject to customary working capital and other adjustments.
Service Experts is a provider of HVAC services and repairs and related services to residential and commercial clients in three Canadian provinces and 29 states in the United States. This merger will help Enercare lead the North American market in home services. It also provides Enercare with geographic diversity, giving the company access to a large HVAC services market in the U.S., as well as giving Enercare access to Service Experts’ customers in order to introduce its own products and services.
Enercare also announced it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. and TD Securities Inc. to issue 14,296,000 subscription receipts on a bought deal basis, totaling approximately $218 million, which will account for a portion of the consideration, the rest of which will be provided on a loan basis by Enercare’s already existing lenders.
“Through Service Experts, we become a North American market leader in home services,” said John Macdonald, president and CEO of Enercare, in a press release. “The acquisition, which is a natural extension to our business, creates an opportunity to drive growth and create shareholder value. This transaction is expected to be immediately accretive to 2016 Normalized pro forma Distributable Cash per common share.”
As well as the subscription receipts to be issued in the offering, the CEO and other Service Experts officers intend to subscribe for $1.6 million of subscription receipts at offering price at the closing of the offering on a private placement basis. It is expected that the subscription receipts issued will be placed under a contractual hold period of six months from closing of the concurrent private placement.