28th Aug 2014 07:30
LONDON (Alliance News) - DCC PLC saw its shares rise early Thursday after it said it will buy Esso's unmanned and motorway retail petrol station network in France for GBP84 million in cash plus all the stock in the petrol tanks, its second deal in this sector this year as it continues to expand in transport fuels.
The support services company bought the Qstar chain of unmanned retail petrol stations in Sweden in May.
In a statement, DCC said the latest deal includes 274 Esso Express unmanned petrol stations, 48 Esso branded motorway concessions, and contracts to supply about 75 dealer-owned-dealer-operated sites. DCC Energy will enter into a long term branded supply agreeement with Esso Société Anonyme Française.
The acquired business will have annual volumes of approximately 1.9 billion litres, revenues of approximately EUR2.2 billion, or GBP1.7 billion, and is expected to generate an initial return on invested capital of approximately 15%, DCC said.
The deal needs to be cleared by EU competition authorities, but DCC hopes it will complete in the first half of 2015, when it will also have an IT and operational infrastructure in place. It is DCC's first acquisition in France.
Once the acquisition is completed, DCC will operate 672 retail service stations in Europe and supply in excess of 2,000 dealer owned service stations. Its energy unit's product split by volume will be 58% road transport fuels, 16% commercial fuels, 16% heating oil and 10% LPG.
DCC shares were up 1% at 3,491 pence early Thursday, one of the biggest gains on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
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