Irish distribution group DCC to focus on higher-returning energy business.
DCC plc has agreed to sell its healthcare division to HealthCo Investment Limited for £1.05bn as the FTSE 100 distribution group moves to streamline its operations.
The buyer, HealthCo Investment Limited, is an independently managed investment subsidiary of funds advised by Investindustrial Advisors Limited.
“The profitable sale creates immediate value for our shareholders”
Dublin-headquartered DCC said that the disposal represented a multiple of approximately 12 times the division’s 2024 adjusted operating profit, significantly above the group’s current trading multiple.
DCC expects to receive net cash proceeds of about £945m from the sale, including a deferred payment of £130m receivable within two years. The transaction is expected to complete in the third quarter of this calendar year, subject to regulatory approvals.
Keeping it simple
Chief executive Donal Murphy described the disposal as “a material step in simplifying DCC’s operations and focusing on our high growth, high return, energy business.”
“The profitable sale creates immediate value for our shareholders, and we are confident that Investindustrial will take DCC Healthcare forward in the best long‐term interests of its employees, customers and suppliers,” he added.
The healthcare division, which recorded revenue of £859.4m and adjusted operating profit of £88.1m in the year ended 31 March 2024, represented approximately 13 per cent of DCC’s adjusted operating profit. The business generated a return on capital employed of 10.2 per cent.
DCC said it anticipates returning a “significant” portion of the proceeds to shareholders following completion, while maintaining an investment-grade balance sheet.
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