DCC to expand further in Europe with German acquisition
International sales, marketing and support services group DCC has announced that DCC LPG is to acquire Germany company Tega-Technische Gase und Gasetechnik (TEGA) from Linde.
TEGA, a liquefied petroleum gas (LPG) and refrigerant gas distribution company, employs approximately 100 people across five operating sites, largely in southern Germany.
The company has revenue of around €75m, which is evenly split between LPG and refrigerants.
TEGA supplies around 35,000 tonnes of LPG annually to approximately 15,000 domestic and commercial customers in Germany.
In addition, TEGA supplies refrigerant gases to wholesalers and end-users for use in air-conditioning, commercial cooling systems and refrigerators.
The business has operated on a stand-alone basis within the Linde group, and it will continue to be led by its existing management team.
Commenting on the announcement, Donal Murphy, CEO of the Dublin-headquartered, London-listed DCC, said that the acquisition would provide DCC LPG with a platform in the large, relatively fragmented German LPG market and further strengthens its position in the LPG market in Europe.
"In addition, the acquisition of TEGA provides an entry into the refrigerant gas market further enhancing the service capability of our business, following our expansion into medical and aerosol gases in recent years. We very much look forward to welcoming the TEGA management and employees into the DCC Group," Mr Murphy said.
The consideration for the transaction will be payable in cash on completion.
Following the completion of the acquisition of TEGA, and based on acquisition activity to date, DCC will have spent approximately £630m on acquisitions in the financial year ending 31 March 2018.
Since CEO Donal Murphy took over from Tommy Breen in July DCC, has entered the Asian and US liquefied petroleum gas (LPG) sectors through acquisitions, including the acquisition in November last year of US-based Retail West for €173m.
According to Davy analysts, this transaction gives DCC an estimated foothold of 2.2pc in the large and relatively fragmented German LPG market.
Davy estimate that there are around 30 main players in this market, of which the largest has a market share of approximately 12pc.