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Registration No. 333-43917
Rule 424(b)(3)
SUPPLEMENT TO PROSPECTUS
DATED JANUARY 13, 1998
Service Experts, Inc.
500,000 Shares
Common Stock
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The Prospectus, dated January 13, 1998 (the "Prospectus"), to which
this Supplement, dated January 14, 1998, is attached (the "Supplement"), relates
to the resale by the holders thereof of up to 500,000 shares of the Company's
Common Stock, $.01 par value per share ("Common Stock") of Service Experts, Inc.
(the "Company"), issued without registration under the Securities Act of 1933,
as amended (the "Securities Act"), in transactions not involving public
offerings in connection with the acquisition of the assets or securities of
heating, ventilating and air conditioning ("HVAC") service and replacement
businesses. In addition, the Prospectus relates to the resale of shares of
Common Stock issued upon exercise of options and warrants and the conversion
into shares of Common Stock of convertible securities issued in connection with
acquisitions, financing activities and related transactions.
This Supplement relates to the resale, from time to time, by Howard L.
and Delvona R. Rude (collectively, the "Shareholders") of up to an aggregate of
171,230 shares (the "Shares") of Common Stock. The Shareholders acquired the
Shares pursuant to an Agreement and Plan of Reorganization, effective as of
September 30, 1997 (the "Purchase Agreement"), pursuant to which the Company
acquired all of the issued and outstanding capital stock of Parrott Mechanical,
Inc., an Idaho corporation ("Parrott"), and pursuant to a Real Property Sale
Agreement, effective as of September 30, 1997 (the "Real Property Agreement"),
pursuant to which Parrott Acquisition Sub, Inc., a Tennessee corporation and
wholly-owned subsidiary of the Company, purchased certain real property owned by
the Shareholders and utilized in the HVAC business of Parrott. Terms defined in
the Prospectus have the same meaning in this Supplement unless the context
otherwise requires.
THIS SUPPLEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
WRITTEN OR ORAL REQUEST, AT NO CHARGE, FROM THE COMPANY. REQUESTS SHOULD BE
DIRECTED TO SERVICE EXPERTS, INC., 111 WESTWOOD PLACE, SUITE 420, BRENTWOOD,
TENNESSEE 37027, ATTENTION: ANTHONY M. SCHOFIELD, CHIEF FINANCIAL OFFICER
(TELEPHONE NUMBER 615-371-9990).
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The date of this Supplement is January 14, 1998
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Selling Shareholders
The Company acquired all of the issued and outstanding capital stock of
Parrott pursuant to the Purchase Agreement. In addition, SEI Sub acquired
certain real property owned by the Shareholders and utilized in connection with
the HVAC business of Parrott pursuant to the Real Property Agreement. In
connection with such transactions, the Company issued the Shares to the
Shareholders in a transaction exempt from the registration requirements of the
Securities Act. The Shares may be resold by a Shareholder through a registered
broker-dealer in accordance with the terms of the Prospectus.
Plan of Offering
This Supplement relates to the reoffering, from time to time, of the
Shares through a registered broker-dealer. The Shareholders have designated
SunTrust Equitable Securities ("Equitable"), a registered broker-dealer, as
agent for the resale of the Shares. The Shares will be sold in private or block
transactions on the New York Stock Exchange or otherwise at fixed prices which
may be changed, at market prices prevailing at the time of the sale, at prices
related to such prevailing market price, or at negotiated prices. Equitable may
effect such transactions by selling the Shares to or through other
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Shareholders, Equitable and/or
the purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they may sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). As a result of the
reoffering of the Shares pursuant to the Prospectus, as supplemented hereby, the
Company and Equitable may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by (or
discounts allowed to) them and any profit on the resale of the Shares as
principal may be deemed to be underwriting discounts and commissions.
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