Frontdoor Inc. (NASDAQ: FTDR), a Memphis-headquartered provider of home warranties, announced it has acquired 2-10 Home Buyers Warranty (2-10 HBW) in an all-cash transaction valued at $585 million.
Founded in Denver in 1980, 2-10 HBW’s new home structural warranty protection plans provide builders’ coverage for structural failures. According to the companies, approximately one in five new homes built in the U.S. are covered by a 2-10 new home structural warranty.
2-10 HBW also provides more traditional home warranties to consumers.
“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 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.”
“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.”
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