DCC to sell healthcare unit for £1.1bn to focus on its energy business

DCC has struck a deal to sell its healthcare arm as part of the FTSE 100 group’s plans to concentrate on its energy business.

The business support services firm agreed to sell the healthcare division for £1.1billion to HealthCo Investment, a subsidiary of European private equity firm Investindustrial Advisors.

It anticipates receiving around £945million in net cash proceeds from the disposal, including deferred payments of £130million within two years.

DCC’s healthcare segment makes medical devices for hospitals, community health providers, and retail pharmacies, as well as beauty products and nutritional supplements like gummies.

It has over 3,000 staff members and functions globally through 11 manufacturing sites, including five in Britain, and distribution and commercial centres.

DCC plans to return surplus cash to shareholders upon completion of the deal, which is expected to happen in the third quarter of this year.

The Dublin-based group announced plans to break up its business last November to focus on its energy segment, which provided nearly three-quarters of its adjusted operating profits in the 2024 financial year.

By comparison, the healthcare division was responsible for just £88.1million of the company’s £682.8million operating profits.

Donal Murphy, chief executive of DCC, said: ‘The disposal of DCC Healthcare is a material step in simplifying DCC’s operations and focusing on our high growth, high return, energy business.

‘The profitable sale creates immediate value for our shareholders, and we are confident that Investindustrial will take DCC Healthcare forward in the best long‐term interests of its employees, customers and suppliers.’

In May 2022, DCC declared a new goal to double the energy division’s operating profits by 2030 while also reducing its customers’ carbon emissions.

Six months ago, it claimed that 35 per cent of DCC Energy’s profits originated from renewable products and services, while 42 per cent came from lower-carbon liquid gas.

Andrea Bonomi, chairman of Investindustrial’s advisory board, said: ‘We are excited about the acquired businesses’ growth potential and look forward to working with their management teams and employees in the next phase of their growth.’

Founded in 1990, InvestIndustrial owns the British furniture brand OKA and classic sports car producer Morgan Motor Company.

DCC shares fell 2.9 per cent to £48.36 on Tuesday morning, meaning they have shrunk by approximately 12 per cent over the past year.