Unlocking value through separation

Oncourse Home Solutions

  • Services
  • Year of investment
  • Fund
    Apax X
  • Status

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.

“The Apax Funds have deep domain experience across the home services market and insurance and warranty product dynamics, with prior investments in Authority Brands, Assured Partners and Hub for example.”
Ashish Karandikar | Partner at Apax

Building on the initial investment thesis around inorganic growth through strategic M&A, in February 2024, OHS, agreed to acquire and carveout the Consumer Energy Appliance Service Plan business from CMS Energy (NYSE: CMS).

The transaction is an opportunity for OHS to quickly build scale and diversity its range of products, partnerships, geographies and revenue mix, unlocking significant cross-sell opportunities.