Last checked at 19 May 2009 07:00
19 May 2009
DCC to acquire Shell's Oil Distribution business in Denmark
DCC plc, the business support services group, announces that it has reached conditional agreement with Shell Denmark to acquire the trade, assets and goodwill of Shell’s oil distribution business in Denmark which distributes heating oils and transport fuels to domestic and small commercial and industrial customers throughout Denmark (“the Business”). DCC has also agreed to enter into a long term supply arrangement with Shell in Denmark. It is anticipated that the transaction will be completed in August 2009, after undertaking the necessary consultations with employees and making other necessary arrangements for the transfer of ownership of the Business.
The Business is based in Copenhagen and delivers product from nine locations throughout Denmark. Following acquisition the Business will operate as a Shell branded distributor with 57 employees. The Business sells approximately 250 million litres of oil per annum to an extensive customer base of c. 30,000 customers. Transport is outsourced to a number of regional hauliers.
The consideration payable for the Business is €14 million, inclusive of assets acquired of €0.9 million, and will be satisfied in cash. While DCC will also acquire the debtors of the Business at completion, the overall net working capital investment in the Business is expected to be minimal.
As the Business was an integral part of Shell it did not report its financial results in a manner consistent with the operations of the Business under new ownership. It is expected that in the first full financial year of ownership, return on capital will be commensurate with that achieved in DCC Energy's other businesses.
Tommy Breen, Chief Executive of DCC plc, said today
"DCC's strong relationships with many of the oil majors have presented it with opportunities to acquire a number of oil distribution businesses in Britain and Ireland over the past decade as some of the majors have withdrawn from local direct oil distribution operations in these markets. We are pleased that our excellent relationship with Shell has led to an agreement for DCC to acquire Shell's oil distribution business in Denmark. This is an initial modest step for DCC Energy in expanding its oil distribution business beyond Britain and Ireland. With a strong local management team and the benefit of DCC's experience in profitably managing and developing local oil distribution businesses, we look forward to growing this business in Denmark over the coming years."
For reference:
Tommy Breen, Chief Executive, DCC plc
Donal Murphy, Managing Director, DCC Energy
Conor Murphy, Investor Relations Manager
Telephone: + 353 1 2799400
Email: investorrelations@dcc.ie
Web: www.dcc.ie