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Simpson Thacher is representing Frontdoor Inc. in a newly inked deal to acquire 2-10 Home Buyers Warranty for $585 million in cash. The transaction, expected to close in Q4 2024, is poised to expand Frontdoor's footprint in the home warranty market.

Frontdoor $585M Home Warranty Co Buy:Strategic Acquisition to Drive Growth

Frontdoor, based in Memphis, sees this acquisition as a significant growth catalyst. "I am optimistic that [the acquisition] will be a tremendous growth catalyst for our business and will help improve the trajectory of our customer base, revenue, and earnings," said Frontdoor Chair and CEO Bill Cobb. The acquisition will allow Frontdoor to diversify into the new home segment, enhancing cross-selling opportunities for home warranties and on-demand services. "In short, through this acquisition, we will gain a highly complementary business that aligns very well with our strategic growth priorities," Cobb added.

2-10 HBW: A New Home Warranty Leader

Denver-based 2-10 Home Buyers Warranty, a portfolio company of Genstar Capital, provides structural warranty protection plans for new homes. Genstar Capital acquired 2-10 HBW in late 2018. The company covers about one in five new homes built in the U.S. with structural warranties.

"This combination will benefit both 2-10 Home Buyers Warranty and Frontdoor," said 2-10's CEO Ryan O'Hara. He emphasized the complementary nature of 2-10’s new home structural warranties and 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."

Frontdoor $585M Home Warranty Co Buy: Financial and Legal Advisers

BofA Securities Inc. is serving as the financial adviser to Frontdoor, with committed financing from JPMorgan Chase Bank NA, BofA Securities Inc., and Wells Fargo Bank NA. Evercore is advising 2-10 Home Buyers Warranty.

The Simpson Thacher & Bartlett LLP team representing Frontdoor includes:

• M&A Partner: Jakob Rendtorff
• Corporate Partner: Kenneth Wallach
• Banking Partners: Christopher Brown and Benjamin Persina
• Capital Markets Partner: Jonathan Ozner
• Antitrust Partner: Peter Guryan
• Benefits Partner: David Rubinsky
• Tax Partner: Andrew Purcell
• IP Partner: Lori Lesser
• Public Company Advisory Partner: Charles Mathes

Details about the Ropes & Gray LLP team representing 2-10 were not immediately available.