DealNet Capital Corp. (CNSX:DLS) has terminated its letter of intent to acquire Atlanta-based Home Services Company, a business that provides heating ventilation and air conditioning (HVAC) after-market protection plans to homeowners in the greater Atlantic area.
The company said it incurred no further costs related to the termination of the preliminary deal.
As of approaching noon today, the company reached a new 52-week high, with its shares rising more than 7.6% to 28 cents.
DealNet, previously called GameCorp, recently transitioned from the gaming industry to HVAC financing and services, water heater rentals and business process outsourcing (BPO), with the infrastructure of the BPO business underpinning the HVAC delivery platform.
The company is moving forward with the growth plans for OC Communications Group (OCCGI) - its BPO subsidiary.
It is also planning to launch One Dealer this quarter, a business designed to provide end-to-end customer management and financing services to the HVAC industry through a network of HVAC dealers.
Through One Dealer, DealNet plans to bring together more than 80,000 small and intermediate-sized dealers in the North American HVAC and water heater rental industry under one umbrella.
One Dealer is expected to help these dealers provide a better customer experience by leveraging fractional call center time through the BPO unit, and at the same time "authorize and encourage them to sell DealNet’s finance products and services”.
The Atlanta-based Home Services Company deal was meant to give DealNet an in-house offering, giving its dealers an additional product to sell.
Under the letter of intent for the Atlanta acquisition, consideration at closing would have been $50,000 in common shares and deferred payments of $100,000 in stock due when HSC achieves certain customer targets. There would have also been an earn-out cash payment of $7.50 per qualified customer, with the earn-out capped at a maximum of $140,000 over a period of two years.
Last week, the company announced the appointment of two key management positions, appointing Ashish Kapoor as CFO and Rick Henry as VP of financial services. The management appointments are expected to help DealNet expand its initiatives.
Kapoor has more than 12 years of experience in public accounting and investment banking, and was most recently senior VP at Macquarie Capital Markets Canada. Henry, meanwhile has more than 25 years in equipment and real estate financing, and as the VP and Canadian managing director, has led finance divisions for both Textron Financial and CitiCapital.
The marriage of the BPO call center and the HVAC industry has indeed shown progress, as DealNet opened two new facilities – in Ft. Meyers, Florida and Reno, Nevada - to service large retail customers in the U.S.
Last month, DealNet said that its BPO subsidiary signed a three-year contract to provide contact centre services to a US energy retailer.
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