Business
Frontdoor, Inc. to Acquire 2-10 Home Buyers Warranty for $585 Million in Cash
Frontdoor acquiring leading provider of new home structural warranties; Increases Frontdoor’s customers, revenue and earnings; Opens new sales channel for
About this update from Frontdoor, Inc.
[{"type":"text","content":"\nFrontdoor acquiring leading provider of new home structural warranties;\nIncreases Frontdoor’s customers, revenue and earnings;\nOpens new sales channel for home warranties;\nDiversifies portfolio into an adjacent and growing category\n\n\n MEMPHIS, Tenn.--(BUSINESS WIRE)--\nFrontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of home warranties, today announced it has entered into an agreement to acquire 2-10 Home Buyers Warranty (2-10 HBW) in an all cash transaction valued at $585 million. The transaction is anticipated to close in the fourth quarter of 2024, subject to regulatory approval and other customary closing conditions.\n\n\nFounded in Denver in 1980, 2-10 HBW is a leading provider of new home structural warranty protection plans. These are insurance-backed offerings that provide builders’ coverage for structural failures. Approximately one in five new homes built in the U.S. are covered by a 2-10 new home structural warranty. The majority of 2-10’s new home revenue comes from repeat builder partners and/or builders with multi-year agreements. 2-10 also provides more traditional home warranties to consumers.\n\n\n“We are extremely excited about the 2-10 acquisition. I am optimistic that it will be a tremendous growth catalyst for our business and will help improve the trajectory of our customer base, revenue and earnings,” said Frontdoor, Inc. Chairman and CEO Bill Cobb. “Additionally, we will be able to diversify and expand into the new home segment, which will open up cross-selling opportunities for home warranties and our on-demand services. In short, through this acquisition, we will gain a highly complementary business that aligns very well with our strategic growth priorities.”\n\n\n“This combination will benefit both 2-10 Home Buyers Warranty and Frontdoor,” said Ryan O’Hara, 2-10 HBW’s CEO. “Our new home structural warranties and home service plans are clearly complementary to Frontdoor’s existing offerings. I am confident that together, our exceptional teams will do great things and I look forward to where these businesses can go in the future.”\n\n\nCompelling Strategic and Financial Rationale\n\n\nBenefits of the transaction include:\n\n\n\nAccelerates Frontdoor’s growth trajectory: Frontdoor expects to benefit from the addition and diversification into a new line of business (new home structural...