Reports: Home Services Giant, A1 Garage, to be Acquired for $2 Billion

Private-equity giant KKR & Co. has agreed to acquire A1 Garage Door Service in a transaction valued at approximately $2 billion, according to a Reuters report citing people familiar with the matter.

The reported deal has not been publicly announced by KKR, A1 or A1’s current private-equity investor, Cortec Group. Reuters reported Sept. 2 that KKR and Cortec declined to comment and A1 could not be reached for comment. As a result, the transaction remains a reported agreement rather than a publicly confirmed or completed acquisition.

Company overview

Phoenix-based A1 is one of the largest residential garage-door repair and replacement companies in the United States. Founder and CEO Tommy Mello started the company in 2007. A1 said in August that it was serving 33 markets nationally following a series of acquisitions that have expanded its geographic reach.

Cortec Group became A1’s financial partner in 2022. An investment group led by Cortec Group Fund VII, together with Mello and A1 management, completed a growth recapitalization of the company on Dec. 22, 2022. Terms of that transaction were not disclosed. At the time, A1 served 25 U.S. markets.

Signs that A1 could be headed toward another transaction emerged before the Reuters report. PE Hub reported Aug. 3 that Cortec was preparing to launch a sale process for A1. The publication reported that A1 had completed at least 17 add-on acquisitions as it expanded under private-equity ownership.

The $2 billion reported purchase price would represent another sizable private-equity investment in the fragmented home-services sector. Reuters cited Oak Hill Capital’s acquisition this year of Guild Garage Group for more than $800 million as another recent example of investor interest in residential garage-door services.

Investor experience

KKR also has considerable experience in both home services and the garage-door industry. Its investments have included Neighborly, the franchisor of numerous home-service brands, and Groundworks, a residential foundation and water-management company.

More notably, KKR previously owned garage-door manufacturer C.H.I. Overhead Doors. It acquired C.H.I. in 2015 and sold the company to Nucor Corp. in 2022 for $3 billion. KKR said the sale generated a 10-times return on its original equity investment.

Meanwhile, A1 has continued making acquisitions. On Aug. 26, it acquired Town and Country Door in Sylvan Lake, Michigan, extending its Metro Detroit presence. Earlier in August, A1 acquired Bullfrog’s Garage Door and Opener Co. in Arizona.

Neither an expected closing date nor financing terms for the reported KKR acquisition have been publicly disclosed. QR