DCC eyes further expansion of energy division after Esso deal (updated)

North Atlantic Energies SA

28/08/2014 12:26

(Adds CEO comments, analyst notes) 
    By Li-mei Hoang 
    LONDON, Aug 28 (Reuters) - Support services group DCC 
 DCC.L  said on Thursday it saw further opportunities to expand 
its energy division after agreeing to buy Esso's motorway retail 
network in France, its biggest ever acquisition, for 84 million 
pounds ($139 million). 
    Chief Executive Tommy Breen told Reuters he planned to grow 
the company's energy business over the coming years and hoped 
for a 15 percent return on investment from the new business. 
    "We want to and can envisage developing a business in a 
number of countries and we currently operate in a wider energy 
business throughout Scandinavia, in Holland, in Austria and 
Germany," he said. 
    "We are in a number of markets already and as oil majors 
divest of more (downstream) businesses, there's just going to be 
more opportunity. We have to react to those," he added.  
    The company said it had agreed in principle to acquire 
Esso's  ESSF.PA  274 unmanned petrol stations, 48 motorway 
concessions and supply contracts, which would give it a 4 
percent share of the French market. 
    The FTSE-250 firm has spent around 1.1 billion euros over 
the past 10 years on acquisitions and investments as part of its 
wider strategy to build a larger presence in the transport fuel 
sector across the United Kingdom and Europe. 
    It is the company's first acquisition in France and second 
major deal in the European unmanned retail petrol station 
market, following its acquisition of Sweden's Qstar in February. 
    The deal is expected to complete in the first half of 2015 
and would see DCC operate the stations under Esso's brand. 
    Breen said the company had spent 90 million pounds this year 
on acquisitions so far and that it aimed to spend around 150-200 
million each year.   
    Shares in DCC were up 1.4 percent to 3,507 pence by 1107 
GMT. 
    "We have increased our earnings estimates for 2015/16 and 
2016/17 on the back of today's announcement that DCC has agreed 
to acquire Esso's unmanned and motorway retail petrol station 
network in France," said Panmure analyst Gert Zonneveld. 
    "The acquisition should initially enhance group earnings per 
share by around 10p on a full year basis. We retain our Buy 
recommendation," he added. 
 
 (Editing by Neil Maidment and Mark Potter) 
 ((limei.hoang@thomsonreuters.com)(020 7542 6513)(Reuters 
Messaging: limei.hoang.thomsonreuters.com@reuters.net)) 
 
Keywords: DCC ACQUISITION/