DCC enters the US market with $200m acquisition
International sales, marketing and support services group DCC has announced that DCC Liquefied Petroleum Gas (DCC LPG) has agreed to acquire US-based Retail West for $200m (€173m).
The acquisition represents the Dublin-based company’s first move into the US market and is another step in its strategy to build a global business.
The US is one of the world's largest LPG markets, however it is also highly fragmented, with over 4,000 LPG distribution businesses operating in the market.
According to a statement from DCC, the acquisition, which is expected to be completed early next year, will provide DCC with a substantial, high-quality presence in the US, with leading market positions in a number of states.
Headquartered in Illinois, Retail West has been in business for over 70 years and currently employs 390 people. It sells approximately 130,000 tonnes of LPG annually from 43 customer service locations and 58 satellite facilities.
Approximately two thirds of Retail West’s annual volume of gas is sold to residential customers, predominantly for heating purposes, with the balance sold to commercial and agricultural customers in both small and large bulk format.
Retail West is expected to initially deliver an annual earnings before interest, taxation, depreciation, and amortisation of approximately $28m.
"The acquisition of Retail West in the US is an exciting development for DCC and is consistent with our ambition to build a substantial presence in the global LPG market.
Our LPG business has grown significantly in recent years and Retail West will give DCC a material platform for development in the large, fragmented and growing LPG market in the US,” Donal Murphy, CEO of DCC, said.