DCC set to acquire German LPG distributor Progas

The FTSE 100 company said the acquisition was contingent on customary regulatory approval and would mark its most substantial expansion into the German market, augmenting its customer base to over 100,000 customers within the country.

Established in 1949, Progas is a prominent LPG distributor in Germany, serving a dedicated clientele of over 70,000 domestic and commercial consumers.

The firm boasts a robust distribution network, facilitating the equivalent of roughly 330 million litres of LPG annually through a comprehensive supply, filling, and distribution infrastructure.

Progas, based in Dortmund, employs 350 people, with its existing management team to remain in charge.

The board said the acquisition aligned with DCC’s strategic vision to bolster its LPG offerings by 50% by 2030.

DCC said its growth strategy also included pursuing synergistic acquisitions to expand its reach in the energy sector.

The transaction, valued at around €160m (£140m) on a cash-free, debt-free basis, would be settled in cash upon completion.

Additionally, it was expected to yield a mid-teens return on capital employed in its first year of ownership.

Completion remained contingent on regulatory approvals and was expected to be completed by the end of the financial year.

“We look forward to welcoming Progas into the DCC Group - scaling DCC Energy’s position in Europe’s largest energy market,” said chief executive officer Donal Murphy.

“It creates a leading platform for DCC Energy in Germany to develop a multi-energy offering, aiming to address the energy ‘trilemma’ for our German customers.

“The acquisition of Progas will enable DCC to accelerate the growth of our energy solutions business in Germany focusing on LPG, renewable LPG, solar, and additional energy management services, where DCC can become the trusted cleaner energy partner to every customer.”

At 0951 GMT, shares in DCC were up 7.5% at 5,016p.

Reporting by Josh White for Sharecast.com.