PARIS: A subsidiary of Dublin-headquartered DCC is set to buy a French natural gas retailer.
Gaz Européen was founded in 2005, when the French natural gas market was first deregulated and opened to competition. The company is a specialist retailer of natural gas and focuses on supplying energy management companies, apartment blocks, public authorities and the service sector in France. Headquartered in Paris, it employs 31 staff and generated revenue of €205m (£178m) for the year to 31 December 2015.
DCC Energy’s acquisition of Gaz Européen is expected to be “highly complementary” to its Butagaz bolt-on, which was acquired in September 2015.
The Irish company has agreed to acquire 97 per cent of the share capital of Gaz Européen based on an initial enterprise value of €110m (£96m). The remaining shares, which are held by members of Gaz Européen’s management team, will be acquired based on Gaz Européen’s results for the three years to 31 March 2021, 2022 and 2023. Tommy Breen, chief executive of DCC, said the deal marks the company’s “first substantial acquisition in the natural gas sector”.
“In recent years DCC has developed a presence in natural gas organically in selected geographies, as natural gas markets have been deregulated,” he added.
“The acquisition of Gaz Européen will significantly accelerate our development in this area in France.”
The deal is conditional on competition clearance from the French Competition Authority and is expected to complete in the first calendar quarter of 2017. Meanwhile, DCC also hailed its “very active and successful” first half-year.
For the six months to 30 September 2016, the sales, marketing and distribution company reported revenue of £5.59bn (€6.49bn) compared to £5.07bn (£5.89bn) the previous 12 months. Pre-tax profit was also up from £52.5m (€60.9m) to £80.6m (€93.6m).
Breen added: “The results reflect continued execution of our strategy to grow the business organically, deliver a very strong cash flow performance and redeploy capital at attractive rates of return.
“The group continues to have the ambition and capacity for further development and importantly, as DCC increases in scale and geographic reach, also has the opportunity to build substantial market positions in its chosen sectors.”
