Warranties firm Domestic & General sold to CVC

Warranties specialist Domestic & General has been snapped up in a £750 million joint takeover by private equity firm CVC and its own management.

Warranties specialist Domestic & General has been snapped up in a £750m (€870m) joint takeover by private equity firm CVC and its own management.

D&G provides millions of warranties for electrical appliances in the UK as well as in Europe, Australia and New Zealand.

The Wimbledon-based group is being sold by investment group Advent, which bought the group in 2007 for £524m (€610m).

It provides cover for 22 million products for 15 million customers, generating annual sales of £600m (€698m). These include 13 million appliances in the UK covered for eight million customers.

The group has long-standing arrangements with major retailers such as Argos to provide warranty services for domestic appliances, and employs around 2,500 staff. UK staff work at headquarters in Wimbledon as well as centres in Nottingham, Brighton and Bedworth, Warkickshire.

Chief executive John Pearmund, who led the senior management investment, said: “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 partner Pev Hooper said: “John Pearmund and his team have built a great business, with real long term growth potential.”

The transaction is subject to regulatory clearance and is expected to take place during the fourth quarter of this year.

Figures from D&G show underlying earnings up 32% to £72.7m (€84.5m) for the year to the end of March 2012. Profits before tax were £31.3m (€36.4m), after a £33.9m (€39.4m) loss the year before.

It is the latest deal to be announced by CVC, after it revealed yesterday that it was in negotiations to buy a tranche of European brands owned by Campbell Soup.