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DCC, the Ireland-based distribution and support services group, has sold its environmental business for £219m in the latest move by outgoing chief executive Tommy Breen to streamline the conglomerate.
In the latest of three big announcements on Wednesday, DCC said it had sold DCC Environmental to Exponent, a private equity group, on a debt-free, cash-free basis.
The unit accounted for 5 per cent of DCC’s operating profit for the year to March 2016. After the disposal, the group will consist of DCC Energy, which will account for 72 per cent of operating profit, DCC Healthcare (16 per cent), and DCC Technology (12 per cent).
Earlier on Wednesday, DCC announced that Mr Breen would retire as chief executive in July and be replaced by Donal Murphy, managing director of DCC Energy and a 19-year veteran of the group. It also said it had bought the liquefied petroleum gas business of Shell in Hong Kong and Macau for an enterprise value of £120m, marking its first acquisition outside Europe.
DCC said the disposal of the environmental division “brings sharpened strategic focus and enables the group to focus fully on its three larger divisions, where the majority of development capital has been committed recently.”
Under the terms of the disposal, DCC will receive about £170m in cash because a quarter of the unit is owned by the group’s long standing minority partner. It will also give rise to an exceptional profit of £30m in the year to March 2018.
The environmental unit includes three British businesses – William Tracey Group, Oakwood Fuels and Wastecycle – and an Irish business named Enva.