BY Richard Summerfield
Energy distributor DCC Energy, which supplies liquid gas and fuels in Europe and the US, has agreed to be acquired by US private equity firms KKR and Energy Capital Partners in a deal worth $7.7bn or £5.75bn.
The deal values DCC at £65.25 a share in cash and will see the London Stock Exchange lose another of its largest companies amid continuing takeover activity, US market defections and a lack of IPOs. The offer includes an additional £1.25 a share if the sale of DCC’s technology arm, Nexora, secures at least £800m.
The board-backed cash offer valued DCC at a 36 percent premium to its average share price in the three months before takeover discussions became public. However, the proposal has met with resistance from investors, with several of the company’s largest shareholders voicing strong opposition. Despite that criticism, DCC’s directors have endorsed the bid from the private equity consortium, arguing that it “represents a compelling and certain opportunity for DCC Energy shareholders to realise value in cash today”.
“Since setting out its new strategy in 2022, DCC Energy has successfully repositioned to become a simpler, leaner, and more focused business,” said Mark Breuer, chair of DCC. “This strategic clarity has laid the foundations for sustainable long-term value creation as a leading multi-energy solutions provider.
“Whilst the DCC Energy Board remains confident in the energy strategy and associated 2030 Ambition announced in 2022, the Board believes the Consortium’s offer represents a compelling opportunity for shareholders to crystallise value in cash at an attractive premium to DCC Energy’s historical trading price. We are confident that the Consortium will be strong stewards of DCC Energy’s 50-year heritage and support the business during its next phase of growth,” he added.
“ECP is excited to begin this long-term partnership with DCC Energy and its exceptional employees,” said Francesco Ciabatti, a partner at ECP. “We look forward to working with the DCC Energy team to build on its long history of providing high quality and dependable service to its millions of customers. ECP has spent two decades investing in complex global energy infrastructure businesses and looks forward to bringing that experience to bear for DCC Energy, working alongside our consortium partners and the DCC Energy team to support its strategic initiatives, development, growth and industry leadership.”
“DCC Energy has built a leading position in energy distribution, and its transition to a pure-play energy business further sharpens its strategy,” said Ryan Miller, managing director, infrastructure, at KKR. “The company is at an important moment, and delivering the next phase of this transition across a complex asset base will require significant operational transformation against the backdrop of a changing and volatile energy market. KKR has a long track record as an active owner in energy infrastructure and services, and we intend to draw on our global platform, operational expertise and sector experience to support DCC Energy’s ambition to become a leading global energy business.”
News: Ireland's DCC Energy to go private in $7.7 billion deal with KKR, Energy Capital