Business support services company DCC has agreed a deal to buy FLAGA, a distributor of liquid gas in Austria, from UGI International
DCC also said it bought AvantiGas liquid gas cylinder business in the UK, also from UGI International, in October.
FLAGA, founded in 1947, is headquartered in Vienna and employs approximately 90 people. It sells and distributes about 45 million litres of liquid gas annually via its nationwide supply, filling and distribution network.
It serves over 15,000 customers across bulk liquid gas where average customer lifetime is more than 15 years, and a significant cylinder business.
Under the terms of the deal, FLAGA's experienced management team will continue to lead the business, DCC said.
DCC has been in the liquid gas market for nearly 50 years, building market-leading positions in six countries and establishing growth platforms in a further three.
"Liquid gas is central to our growth strategy and accounts for the most significant part of our Energy Solutions operating profit. As a lower carbon energy solution, it is one of our key priorities for growth and for capital deployment," DCC said.
"The acquisition of FLAGA marks our entry into the Austrian liquid gas market, where we already have a leading liquid fuels business and a growing presence in energy services," it added.
The FLAGA purchase is based on an enterprise value of approximately €55m on a cash-free, debt-free basis and the consideration will be settled in cash on completion.
DCC said the acquisition is expected to generate a mid-teen return on capital employed in the first year of ownership.
The deal is subject to customary regulatory approval and expected to complete by the end of the company's financial year.
The second acquisition announced today - AvantiGas's cylinder business - is a bolt-on in the UK, where the business is a leader in liquid gas products for customers who are off the natural gas grid.
Donal Murphy, the chief executive of DCC, said the two deals announced today are an important step in the company's strategy to be the leading energy solutions provider in its chosen markets.
"Liquid gas represents a compelling opportunity for DCC and is one of our two key growth priorities. We are already leaders in liquid gas in six European markets where we provide lower-carbon energy solutions to our loyal customer base," Mr Murphy said.
"We are leveraging these leadership positions to build a comprehensive energy solutions business in these markets," he added.
