Unlocking value through separation

In December 2021, Apax X acquired the homeowner services subsidiary of American Water Works via a carveout.

The subsidiary, now rebranded to Oncourse Home Solutions (“OHS”), provides various warranty protection programmes and other home services to residential customers across the US. It services 1.5 million homeowners across 43 states and Washington, D.C.

Carveouts are complex transactions where a new business is created through the separation of a subsidiary from a much larger business. Often they’re under resourced units but with potential for value creation and over the last seven years the Apax OEP has been building out their capabilities in this area.

At the time of the acquisition of OHS, Apax X had tracked the company for 18 months and identified it as a high-quality business with multiple organic and inorganic value creation levers available to drive growth. Additionally, the utilities home warranty sector represents an attractive market given its high margins, high retention rates, high barriers to entry and ample opportunities for cross-sell.