Irish-based DCC plc has agreed to sell its healthcare division to HealthCo Investment Ltd in a deal that values the business at £1.05bn (€1.22bn) on a cash-free, debt-free basis.
HealthCo is an independent managed investment subsidiary of funds managed and/or advised by Investindustrial Advisors Ltd.
The deal is part of the group's strategy to streamline its operations and focus on its energy business to maximise shareholder value.
DCC anticipates that surplus cash arising from the simplification of its business will be returned to shareholders while the group can still maintain a strong balance sheet.
The FTSE-listed group expects net cash proceeds of £945m from the sale, including an unconditional deferred amount of £130m receivable within two years.
Certa and Flogas owner DCC anticipates that the deal will be finalised and that it will take receipt of the initial cash proceeds in the third quarter of the year.
"The disposal of DCC Healthcare is a material step in simplifying DCC's operations and focusing on our high growth, high return, energy business," said Donal Murphy, CEO of DCC.
"Our strategy will continue to build DCC as a market-leading multi-energy business. The profitable sale creates immediate value for our shareholders, and we are confident that Investindustrial will take DCC Healthcare forward in the best long‐term interests of its employees, customers and suppliers."
DCC Healthcare recorded revenue of £859.4m and an adjusted operating profit of £88.1m in the 12 months to the end of March 2024. The division represented 13% of the DCC's adjusted operating profit for that financial year.
The proposed transaction represents a 12-fold of its 2024 adjusted operating profit. DCC Healthcare had a book value of £765m as of September 2024.
DCC first announced it was planning to sell DCC Healthcare in November.
Photo: Donal Murphy. (Pic: File)
