Private equity giant KKR & Co. agreed to buy Neighborly, the home services franchisor with 28 brands under its umbrella and $ 3 billion in system sales, double the amount just three years after the purchase of Harvest Partners in March 2018.
“We have had a tremendous amount of interest coming in over the past few months and frankly over the past year. It’s pretty early given the time we’ve traded with Harvest Partners. Normally there isn’t as much interest coming in when you’re new as a partner, ”said Mike Bidwell, CEO of Neighborly.
“We worked with Harvest, we decided to test the market to see if it was the right time, and it turned out to be the case. It was a great result across the board so we couldn’t be happier.
KKR & Co. raised around $ 18.5 billion for its latest North American private equity fund, which closed in May and was its largest such fund to date, according to Reuters. The fund is larger than its most recent North American fund raised in 2006, at $ 17.6 billion.
KKR had $ 349 billion in assets under management in April. Harvest Partners, on the other hand, has $ 7 billion in assets under management. Read here to learn more about the history of Neighborly, formerly known as Dwyer Group.
Led by co-founders Henry Kravis and George Roberts and now publicly traded, KKR, like other private equity firms, came to prominence in Oliver Stone’s 1987 film “Wall Street” in in which investors bought companies through debt buyouts, then closed factories and reduced the number of employees.
Bidwell said the stereotype was outdated. “First of all, it was the beginnings of private equity. It was just a different space. Today, it is a very competitive private equity market, there are thousands of them. With that probably came, there is more humanization of space, ”he said.
“My experience, at least with the companies we have been associated with, there is none of that. They are all very socially aware; they are all very concerned about the people in the company and they want to be a partner of choice, ”he said. “We really love the people we met at KKR; there seems to be a tremendous cultural alignment.
Bidwell said he would remain CEO after the deal is done and that his mandate would be to “continue what we’ve been doing. We expect that we will continue to be acquirers, acquiring complementary businesses in our defined “home services space.”
Felix Gernburd, Managing Director of KKR, said in a statement: “In a large and highly fragmented industry, Neighbourly stands out with its differentiated strategy of bringing together adjacent services under a diverse and technological platform, and, most importantly, for his unparalleled dedication to customer service.
Terms of the contract are not disclosed. It is scheduled to close in the third quarter of 2021.