Business services group DCC has bought Carlton Fuels, a north of England-based oil distribution company, for €21 million to strengthen its business in the region.
DCC will pay an initial consideration of €13.3 million in cash and take on about €4.7 million of Carlton's debt. It will make a further payment of up to €3.2 million over the next five years depending on the company achieving certain profit targets.
Colman O'Keeffe, deputy managing director of DCC's energy division, welcomed the acquisition, saying the company was a significant find in a market that is dominated by small, family-owned companies.
Carlton sells about 500 million litres of fuel a year, mainly in the form of diesel and gas oil, to a range of commercial, transport and local government customers.
According to Mr O'Keeffe, the majority of oil distribution businesses in the UK only sell 50-100 million litres of fuel a year, making Carlton a significant player in what is a very fragmented market.
DCC will take on Carlton's 118 staff and integrate the group's operations into its own business.
Carlton is expected to report adjusted operating profit of about €4.6 million for the year ended June on sales of about €404 million. In May, DCC revealed that its energy division had operating profits of €56 million in 2005, up 8 per cent on the prior year.
The division, DCC's biggest, has benefited from a raft of bolt-on acquisitions in the UK in recent years and Mr O'Keeffe said he was hopeful the company would make further acquisitions in this area in the future.
Carlton's managing director Paul Vian and operations director Paul Williams will join the management team of DCC Energy, a move welcomed by Mr O'Keeffe.
The Irish company's shares rose 2.2 per cent, or 42 cent, to €19.22.
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