Gas group buys Dyno-Rod
British Gas owner Centrica today bought building repair company Dyno-Rod in a £57.6m (€83.9m) deal that boosted its home services operation.
Centrica said the acquisition also gave it access to 14 million private households which rely on emergency call-out services in a market worth more than £500m (€728.5m) a year.
The deal hands Dyno-Rod founder Jim Zockoll a windfall of £49m (€71.4m) and ends speculation that the firm might be heading for a stock market listing.
British Gas has 1.2 million customers who have signed up for plumbing and drain cover, with much of this work handed to Dyno-Rod on a contractual basis.
Acquiring the group should create operational savings as well as helping to retain British Gas customers by offering a wider range of services, Centrica said.
Dyno-Rod employs 131 staff at its head office in Surbiton, Surrey, and has 162 franchises offering services from emergency plumbing and locksmith services to pest control.
As well as domestic customers and British Gas, it provides services to a range of corporate clients, including housebuilders Barratt and Taylor Woodrow.
In 2004, Dyno-Rod is expected to have generated revenues of £13m (€18.9m) as a company, while turnover from its wider franchise operation is forecast at £60m (€87.4m). Pre-tax profits for the year are predicted to be £6m (€8.7m).
British Gas managing director Mark Clare said Dyno-Rod was a “well-established and trusted brand” that complemented its services to British Gas customers.
He said: “This acquisition will give us better access to the 14 million private households who currently rely heavily on emergency call-out services.”
In addition to plumbing services to households, Centrica said it was investigating the possibility of using Dyno-Rod to provide maintenance services to corporate customers.
Mr Zockoll, an American citizen who sold his 85% stake in Dyno-Rod, developed the business into a nationwide brand since founding it as a plumbing firm during his spare time in Wimbledon in 1963.
Details emerged on the same day that Centrica wrapped up the sale of the AA motoring organisation to two private equity groups for £1.75bn (€2.5bn).
Permira and CVC Capital completed the acquisition after it was cleared by regulators in the UK and European Union.
