DCC, the Irish conglomerate seeking to narrow its focus to energy, said it has agreed to sell its information technology distribution business in Ireland and Britain to German-based private equity group Aurelius in a deal worth £100 million (€115 million).
That leaves the larger unit in DCC’s technology division, the North America-focused pro tech business which specialises in audiovisual equipment for events companies, still on the block.
The Info Tech unit is being sold on a cash-free, debt free basis and had been the subject of restructuring in advance of the sale, DCC said in a statement on Monday. The net cash proceeds from the deal “are not material”, it said, reflecting working capital seasonality and the supply chain financing associated with the business.
The deal excludes a the freehold of a distribution centre in Burnley in England, which is to be sold separately and estimated to be worth £50 million.
RM Block
Goodbody Stockbrokers analyst Kenneth Rumph said the sale of the UK and Ireland business and the logistics hub is below the £183 million he had expected and a “small disappointment”.
However, he added: “The removal of the trading uncertainty and a business, which the market was not attributing any value to, may prove to be a positive.”
DCC said that, in the year to end-March, the business recorded revenue of £2 billion and represented around 1 per cent of DCC’s £617.5 million operating profit for continuing businesses. The sale is expected to conclude by the end of 2025.
“The divestment of Info Tech in the UK and Ireland is a further material step in simplifying our group and focusing on our high growth, high return, energy business,” said DCC chief executive Donal Murphy.
“This transaction also represents a positive move for our team, providing new opportunities for growth, development, and long-term success.”
Founded in 1976 by businessman Jim Flavin as a provider of venture capital for start-ups before floating almost two decades later, DCC revealed in November it was ditching its conglomerate roots with a plan to sell its healthcare division and review “strategic options” for its technology business, in order to focus on its energy unit.
The group agreed last month in April to sell the healthcare unit to HealthCo Investment, which is owned by funds run or advised by London-based private equity firm Investindustrial Advisors for £945 million in cash, plus £130 million in deferred payments.
Leases, taxes owing and other liabilities transferring with the healthcare unit bring the total enterprise value of the transaction to £1.05 billion.
Analysts had widely expected DCC to sell its technology operations in two transactions.
The division booked a £52 million charge against the loss-making French and Iberian arms of its Exertis business, which distributes tech gadgets from home security cameras to wireless keyboards. It also agreed in April to sell two units for what it called “a modest consideration”, and exited small tech distribution businesses in the Middle East and Scandinavia.
DCC also took an almost £74 million goodwill impairment hit against its UK information technology business. A profit recovery in the business “has taken longer than expected”, it said, with market conditions “showing little signs of improving”.
The bulk of £37 million in restructuring costs racked up by DCC last year covered large “optimisation and integration” projects in its technology division in North America and the UK.
