DCC to sell UK tech unit with 2 bln stg revenue for minimal cash

DCC plc has agreed to sell its UK and Ireland information technology distribution business to private equity firm AURELIUS, as the Dublin-based group continues to streamline its operations to focus on energy.

The deal values the business, which generated revenue of 2 billion British Pounds in the year to March 31, at an enterprise value of approximately 100 million British Pounds, the company said on Monday.

However, DCC said the net cash proceeds from the transaction will not be material, citing working capital seasonality and supply chain financing of 156 million British Pounds associated with the unit.

The sale follows DCC's disposal of its healthcare division, announced in April, and is part of a strategy outlined last year to simplify the group.

"The divestment of Info Tech in the UK and Ireland is a further material step in simplifying our Group and focusing on our high growth, high return, energy business," Chief Executive Donal Murphy said in a statement.

The Info Tech business, which contributed about 1% of DCC's continuing operating profit, has faced challenging market conditions, according to the company.

In May, DCC recognized a non-cash goodwill impairment of 73.9 million British Pounds related to the UK component of the unit.

The transaction is expected to complete in the fourth quarter of this calendar year, subject to regulatory approvals.