Appliance Repair Services Sector M&A Activity

Part
01
of two
Part
01

Appliance Repair Services Sector M&A Activity Part 1

Although the recent M&A transactions between Serviz and Porch, Commercial Appliance Service and Parts Town, and Broughton Appliance Service and Appliances on Lakeside were each unique in deal structure, it's noteworthy that in all three cases, the acquisition target maintained its independent name and website following the merger.

SERVIZ / PORCH

  • In August of 2018, Seattle-based home service platform Porch acquired Los Angeles-based home service platform Serviz.
  • Currently, Porch is a fairly sizable company, with almost 900 employees, a network of over three million professionals, and a record of facilitating over 130 million service jobs.
  • In contrast, Serviz was a smaller competitor, having facilitated closer to 40,000 service jobs in the past three years.
  • Although the terms of the deal were not disclosed, Serviz announced that the deal would enable the company to expand its business by accessing more customers, offering better services and creating more work for their home-service professionals.
  • Additionally, Porch CEO Matt Ehrlichman highlighted that deal was part of a larger corporate strategy for Porch, focused on expanding their business through inorganic growth in the form of partnerships and M&A deals.
  • In particular, Porch highlighted the "advanced technology" and portfolio of business that Serviz would contribute to the Porch ecosystem.
  • Notably, as part of the deal, Porch committed to maintaining the Serviz "brand, website and experience," while still integrating the Serviz technology into Porch.com.
  • Moreover, Serviz maintained its Los Angeles headquarters, along with 50 personnel, including Serviz General Manager Jason Whitt.
  • However, Serviz CEO Zorik Gordon did not transition to the newly merged entity.

COMMERCIAL APPLIANCE SERVICE / PARTS TOWN

  • Notably, no formal, public announcement of the deal was released, and publicly available literature on the Commercial Appliance Service acquisition was limited to a credit announcement by Moody's Investor Service.
  • As such, information related to the motivations and stipulations of the acquisition are limited, however it appears likely that the deal was part of Parts Town's larger growth strategy through the acquisition of fellow foodservice products distributors, including the purchase of PartsXpress in July of 2018.
  • Meanwhile, while any transitions in leadership due to the deal were not announced, the president of Commercial Appliance Service, John Schwindt Hawkins, held the executive role at the foodservice products distributor before the deal was finalized, and continues to publicly present himself in that role as part of his leadership within the Commercial Food Equipment Service Association.
  • Similarly, Commercial Appliance Service continues to maintain its name and independent website.

BROUGHTON APPLIANCE SERVICE / APPLIANCES ON LAKESIDE

  • As such, information related to the motivations and stipulations of the acquisition are limited.
  • However, Appliances on Lakeside did announce that the deal would allow the joined companies to provide better service to their existing footprint of customers, and it appears likely that the deal was intended to buttress or expand the complimentary appliance service operation of Appliances on Lakeside with Broughton Appliance Service's more focused appliance repair operations.
  • Additionally, while any transitions in leadership due to the deal were not announced, it appears that the leadership of Broughton Appliance Service either left the company after the merger or moved to different roles within the company, given that Mrs. Tammy Kelley is now the principal, president and/or owner of both Appliances on Lakeside and Broughton Appliance Service, according to the Better Business Bureau.
  • However, Broughton Appliance Service continues to maintain its name and independent website.
Part
02
of two
Part
02

Appliance Repair Services Sector M&A Activity Part 2

In 2019 and 2018, Smart Care Equipment Solutions acquired Mid-South Maintenance and Alpro Service Company at an undisclosed amount. The benefit of the acquisition of Alpro Service Company will make Smart Care the largest provider of kitchen equipment repair services in the country’s largest market. In March 2019, Reddi Industries acquired Action Appliance, Inc. to add appliance repair to its service offerings.

SMART CARE

Mid-South Maintenance Acquisition:

  • Smart Care Equipment Solutions is a private company founded in 1878. The company's headquarters is located in St. Paul, Minnesota, United States.
  • Smart Care Equipment Solutions offers cooking equipment services, refrigeration, and warewashing equipment services. The company is a stand-alone commercial kitchen equipment service and maintenance organization.
  • The company revenue was estimated to be $200 million and currently has over 1,000 employees and 600 technicians.
  • In February 2019, Smart Care Equipment Solutions acquired Mid-South Maintenance at an undisclosed amount.
  • Mid-South Maintenance was founded in 1992. The company provides commercial kitchen equipment repair and maintenance services to the commercial foodservice industry — design, fabrication, installation, and repair services are some services offered by the Mid-South Maintenance company.
  • Mid-South Maintenance employees (44) were transferred to Smart Care, and Mid-South Maintenance chief technician Gary Garrett was promoted to general manager of Smart Care Equipment Solutions.
  • After the acquisition, Mid-South Maintenance continues to run as an independent division of Smart Care Equipment Solutions.
  • The acquisition will benefit Smart Care Equipment Solutions by strengthening the company position in Nashville and Mid-South Maintenance with the ability to tap into Smart Care’s training, technical support, and access to parts.

Alpro Service Company Acquisition:

  • In June 2018, Smart Care Equipment Solutions acquired Alpro Service Company.
  • Alpro Service Company was founded in 1947. The company offers repairs services for commercial foodservice equipment industry in the New York States area.
  • Alpro Service Company's acquisition deal was not disclosed in the public domain.
  • The benefit of the acquisition of Alpro Service Company will make Smart Care the largest provider of kitchen equipment repair services in the country’s largest market.

REDDI

  • Reddi is a family-owned company that offers a wide selection of fence products and installation options. Plumbing, industrial waste disposal, heating and cooling, fencing, electrical, sprinklers, lawn care, and garage doors are some services of Reddi Company.
  • The company employee count was estimated to be 170 — annual revenue of $33.6 million.
  • In March 2019, Reddi Industries acquired Action Appliance, Inc. to add appliance repair to its service offerings.
  • The financial figures of the transaction were not disclosed publicly.
  • Action Appliance maintained its brand and website after the acquisition.
  • The acquisition of Action Appliance will benefit Reddi by expanding its portfolio to incorporate technicians that offer expert services for all brands of major appliances.

MARATHON APPLIANCE AND APPLIANCE CHAMPION; MERGER

  • Appliance Champion is a multi-service appliance repair company. Refrigerator repair, range repair, microwave repair, washer repair, dryer repair, and dishwasher repair are some services offered by Appliance Champion.
  • Marathon Appliance provides timely and accurate repairs to meet customer's satisfaction and loyalty. Complete system diagnosis, preventative maintenance, warranty on all repairs, new O.E.M parts, area of service left clean and neat, and all in-home repairs are some services offered by Marathon Appliance.
  • In October 2018, Appliance Champion and Marathon Appliance merged their appliance repair businesses in the Dallas-Ft. Worth area.
  • Both companies maintained their brands and websites after the merger.
  • The benefit of the merger is to expand the business portfolio and increase customer satisfaction in the Dallas-Fort Worth area. As a result of the merger, Appliance Champion is offering a $25 discount from customers' services.

RESEARCH STRATEGY

To locate the details of mergers and acquisitions of appliance repair companies by Smart Care, Reddi, and Appliance Champion, we began by combing through companies' websites and newsletters. While we were able to locate the date of mergers and acquisitions, as well as the benefits of the transaction, information regarding the financial details was undisclosed.

Research continued through press releases and third-party company databases for information regarding the financial figures of these transactions. Unfortunately, information regarding the financial figures was undisclosed. Information found referenced the status of the companies, founding years, and recent news regarding the companies.

Next, we changed gears by combing through the companies' annual reports and financial filings. We hoped to locate detailed information about the mergers and acquisitions with specific information regarding the financial figures of the transactions. Again, this strategy was unsuccessful. Information regarding financial filings of the companies was not reported in the public domain, most likely because the companies are privately held and are under no obligation to publish financial information.

Lastly, we scoured business journals for information regarding financial figures of mergers/acquisitions of Smart Care, Reddi, and Appliance Champion. Studies reported were referencing the impact of mergers/acquisitions and improving mergers/acquisitions. We were unable to locate specific information regarding the financial figures of the transaction. Hence, we concluded that information regarding the financial figures of the mergers/acquisition has not been reported in the public domain.


Sources
Sources

From Part 01