DCC Regulatory News (DCC)

27 September 2018

DCC Technology announces significant expansion of its business in North America

DCC plc, the leading international sales, marketing and support services group, announces that DCC Technology has acquired the Jam Group of Companies ("Jam", comprising Jam Industries Ltd. and Jam International Ltd.). Jam is a market-leading North American specialist sales, marketing and services business, serving the professional audio, musical instruments and consumer electronics product sectors.

Headquartered in Montreal, Canada, Jam is a world-leader in the professional audio and musical instruments sectors1, providing a range of industry-leading, value adding services and solutions to both its vendor and customer partners. This product sector and channel specialisation includes marketing and sales support, in-house technicians providing technical support, after-sales, repair and warranty repair services, in-house graphics and print services and the provision of white-label e-commerce platforms for smaller retailers and resellers. The business distributes in excess of 500 third party brands, with the majority of these relationships being exclusive, from leading vendors such as Allan & Heath, Focusrite, Harman, Incipio and Marshall and also develops and sells a range of complementary own-brand products. Jam sells to approximately 6,000 B2B and retail customers, including large retailers, e-tailers and specialist retailers and resellers across North America.

Jam is led by an experienced and proven management team, who will continue to manage the business following the acquisition. Jam's operational footprint includes a Canadian sales office and national distribution centre, with a further national distribution centre and six sales offices across the US. The business recorded revenue of US$323 million in the year ended 30 April 2018 and employs approximately 570 people.

The acquisition of Jam is DCC Technology's second acquisition in North America following the acquisition of Stampede in July 2018. The acquisition represents a further step in DCC Technology's strategy to extend its geographic footprint and product range, strengthening its partnership with existing suppliers while also broadening its base of customers and suppliers. Importantly, the very strong service capability of Jam is consistent with DCC Technology's increasing focus on positioning itself as a specialist service partner for customers and suppliers, providing extensive brand reach, market access and simplifying the complex supply chain of its chosen sectors.

The initial enterprise value of Jam is US$170 million (c. £130 million) and DCC expects the acquisition to be 4.5% EPS accretive2 from completion and to generate a return on capital employed of c. 15% in the first full year of ownership.

1 Addressable market is distribution only

2 Based on DCC's financial year ended 31 March 2018

Donal Murphy, Chief Executive of DCC plc, said today:

"The acquisition of Jam significantly strengthens DCC Technology's position in the North American market. DCC Technology now has approximately US$600 million in revenue in North America with a strong, service-led, specialist focus on professional audio and visual, musical instruments and consumer electronics. The growing and fragmented nature of these markets will provide DCC Technology with further opportunities for development in the coming years." 

For reference:

Donal Murphy, Chief Executive

Tim Griffin, Managing Director, DCC Technology

Kevin Lucey, Head of Capital Markets

Telephone: +353 1 2799 400

Email: investorrelations@dcc.ie

Web: www.dcc.ie

Powerscourt (Media)

Lisa Kavanagh / Victoria Palmer-Moore

Telephone: +44 20 7250 1446

Email: DCC@powerscourtgroup.com

About DCC plc

DCC is a leading international sales, marketing and support services group with a clear focus on performance and growth. It operates through four divisions: LPG, Retail & Oil, Healthcare and Technology.

DCC is an ambitious and entrepreneurial business operating in 17 countries, supplying products and services used by millions of people every day throughout Europe and beyond. Building strong routes to market, driving for results, focusing on cash conversion and generating superior sustainable returns on capital employed enable the Group to reinvest in its business, creating value for its stakeholders.

Headquartered in Dublin, employing approximately 12,000 people, DCC's four divisions are:

· DCC LPG - a leading LPG sales and marketing business with operations in Europe, the US and Asia and a developing business in the retailing of natural gas and electricity;

· DCC Retail & Oil - a leader in the sales, marketing and retailing of transport and commercial fuels, heating oils and related products and services in Europe;

· DCC Healthcare - a leading healthcare business, providing products and services to healthcare providers and health and beauty brand owners; and

· DCC Technology - a leading sales, marketing and value-added services partner for global technology brands.

DCC plc is listed on the London Stock Exchange and is a constituent of the FTSE 100. In its financial year ended 31 March 2018, DCC generated revenue of £14.3 billion and operating profit of £383.4 million.

DCC has an excellent record, delivering compound annual growth of 14.4% in operating profit, generating an average return on capital employed of approximately 19% and delivering total shareholder return of 6,450% over 24 years as a public company.

About DCC Technology

DCC Technology is a a leading sales, marketing and value-added services partner for global technology brands.

DCC Technology, which principally trades under the Exertis brand, provides a broad range of consumer and business technology products and services to customers across the consumer, B2B and enterprise markets. It now operates in 16 countries with its principal operations in the UK, US, Canada, Ireland, France, Sweden and the United Arab Emirates.