DCC (LON: DCC) is acquiring solar panels and clean energy technology distributor PVO, which is part of the strategy to acquire renewable energy businesses and reduce dependence on oil and gas distribution.
Ireland-based DCC has already made smaller acquisitions in this area. One-fifth of DCC Energy’s operating profit comes from renewables and services, although it is a smaller proportion of group operating profit. DCC says that its experience in helping customers to transition to cleaner energy products that will help PVO to grow. Annual revenues are €190m (£169m). The deal requires regulatory approval in the Netherlands, Germany, Austria and Poland.
The deal should be completed by the end of the year, so there could be three or four months of contribution for the year to March 2023. Peel Hunt has raised its 2022-23 pre-tax profit forecast by £2.2m (assuming three months) to £603.2m. A full year contribution could add £8.8m to profit.
The amount being paid for Netherlands-based PVO was not disclosed but there was an upfront cash payment with earn out payments based on trading in each of the next three years. DCC is focused on LPG and oil distribution businesses, which have recently been combined into the new DCC Energy division, although it also has healthcare and technology businesses.
