Business support services company DCC has recently completed the acquisition of United Propane Gas, a deal which materially expands its presence in the US LPG market.
UPG is DCC LPG's largest acquisition since initially entering the US market in April 2018.
DCC said the deal is a further significant step in the execution of the strategy to build a business of scale in the highly attractive and growing US LPG market.
It will considerably expand DCC LPG's geographic presence from 14 to 21 states, will almost double its customer base to over 230,000 customers.
The deal will also create the sixth largest business in the highly fragmented US LPG market, DCC added.
UPG markets, sells and delivers LPG and related products and services to residential, agricultural and commercial customers in 13 midwest and southern states, with a particularly strong presence in Kentucky, Tennessee and Alabama.
Headquartered in Paducah, Kentucky, the business employs about 360 people and has over 110,000 active customers.
It sells about 120,000 tonnes of LPG annually from 80 operating locations. Roughly two-thirds of annual volume are sold to residential customers, with the rest sold to agricultural and commercial customers.
DCC said that along with a recent smaller bolt-on acquisition completed in Colorado, the combined enterprise value of the transactions was $145m.
It said it paid for the companies in cash from its "extensive resources".
The company said the new acquisitions will be earnings enhancing from completion and the after-tax cash payback will be approximately nine years.
DCC, which is headquartered in Dublin and listed in London, operates in a range of sectors including technology and healthcare, but its gas and fuel forecourt operations are the biggest part of its business.
Donal Murphy, the chief executive of DCC, said the deal to acquire UPG is consistent with the company's ambition to build a substantial presence in the global LPG market.
"Since our initial entry into the US LPG market in April 2018 we have now committed approximately $445m of acquisition capital in building DCC Propane into the sixth largest business in the market," Donal Murphy said.
"Building a business of scale in the US LPG market provides DCC with a strong platform to provide our customers with their energy needs now and into the future," the CEO said.
He said the acquisition of UPG now means that DCC has a business of real scale with a presence in 21 states, employing over 800 people and serving the energy needs of over 230,000 customers.
"Notwithstanding this growth, the opportunity for further expansion remains significant and UPG will further enhance our platform for development in the large, highly fragmented, and growing LPG market in the US," he added.
