DCC to launch £600m buyback in November after healthcare unit sale

DCC, the Irish conglomerate seeking to narrow its focus to energy, said it plans to start a £600 million (€694 million) share buyback in November, after confirming on Wednesday that it has completed the sale of its healthcare unit.

Shares in the FTSE 100-listed company, which is led by chief executive Donal Murphy, rose 3.6 per cent in early trading.

DCC said finalisation of the deal, following customary regulatory approvals, is a “material step in the group’s strategy to simplify operations, maximise shareholder value and accelerate the growth of its energy business, the group’s largest and highest returning division”.

The group said in April that it had agreed to sell its healthcare division – which spans the distribution of medical devices to developing and manufacturing nutritional supplements – for £945 million in cash, with £130 million of this deferred for payment within two years. The buyer is HealthCo Investment, which is owned by funds run or advised by London-based private equity firm Investindustrial Advisors.

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DCC subsequently went about buying back an initial £100 million of its stock to share the proceeds with investors. That programme is due to compete in the coming weeks.

“DCC also intends to launch a £600 million tender offer shortly after its interim results in November, with the expectation of completing the tender offer in December,” it said in a statement on Wednesday.

A further £100 million will be returned to shareholders following receipt of the unconditional deferred consideration, it added.

In July, DCC agreed to sell its information technology distribution business in Ireland and Britain to German-based private equity group Aurelius in a deal worth £100 million. The deal excludes the freehold of a distribution centre in Burnley in England, which is to be sold separately and estimated to be worth £50 million.

That leaves the larger unit in DCC’s technology division, the North America-focused pro tech business, which specialises in audiovisual equipment for events companies, still on the block.