DCC snaps up UK office supply firm in €17.5m deal
Published 10/03/2011 | 05:00
DUBLIN-listed DCC has agreed a €17.5m deal to buy UK office supplies distributor Advent Data. It is the second acquisition by DCC this year and more deals are already being tipped.
In a stock market announcement, DCC said it was paying an initial cash consideration of €11.9m for Advent and had agreed to pay up to €5.6m more, if trading targets were met over the next three years.
In addition to the price being paid, Advent has debts of €7.2m, giving a total enterprise value of €24.2m. The "deferred considerations" is seen as a particular positive by analysts.
"This is a good deal for DCC. The price looks good and the business fits well with the Micro P business DCC already owns in the UK. It should enhance the current offering," NCB Stockbrokers' Conor Harnett told the Irish Independent.
Shares in DCC were up just over a half a percent after the news, at €23.285 per share in Dublin. The company is valued at €1.9bn.
Leeds-based Advent Data employs 110 staff and is a wholesale distributor of electronic office and printing supplies. Advent Data has a market share of about 10pc in the niche printer supply segment.
Advent Data had a turnover of €150m last year and generated profits of €4.5m in the year to the end of August 2010.
The acquisition is expected to be earnings enhancing by 2012.
The business will become part of DCC's SerCom division. SerCom is already a significant player in the UK market though its Micro-P subsidiary.
The latest acquisition is DCC's second UK takeover this year.
In February, DCC's energy division paid €27.7m to buy Pace Fuelcare in an all-cash deal. Pace supplies fuel to independent petrol stations and commercial customers, mostly in southern England. It has a 1pc share of the market.
DCC is also rumoured to be considering a bid for Total Butler, a bigger rival of Pace Fuelcare with 2pc market share. Total Butler is owned by French oil giant Total; a bid could be worth around double the price paid for Pace Fuelcare.
DCC operates through five main divisions focused on the energy, food and drink, healthcare and environment sectors, as well as the SerCom unit.