KKR-led group buys DCC Energy for $7.7 billion at 36% premium

A KKR-led consortium is taking DCC Energy private in a £5.75 billion deal that hands shareholders a 36% premium.

A consortium of KKR and Energy Capital Partners agreed to acquire Irish energy distributor DCC Energy for £5.75 billion ($7.68 billion), the parties said Monday, ending a three-month pursuit that began with a rejected £4.95 billion offer.

"The board believes the consortium's offer represents a compelling opportunity for shareholders to crystallize value in cash at an attractive premium to DCC Energy's historical trading price," Mark Breuer, chair of DCC Energy, said.

DCC shareholders will receive £65.25 in cash per share, a proposed final dividend of 147.22 pence, and a potential payment of up to £1.25 if the company sells its Nexora technology unit for at least $800 million. The final price represents a 36% premium to DCC's volume-weighted average share price of £49.07 over the 12 months through April 28 and exceeds the stock's level at any point in the past five years.

The deal shows private equity's growing appetite for energy infrastructure assets with stable cash flows, as KKR and Energy Capital gain control of a business spanning 9,500 employees across Europe and North America. DCC reported £15.42 billion in revenue and £634 million in operating profit for the year ended March 31, up 3.6% year-over-year.

DCC, founded in Dublin in 1976 and listed on the London Stock Exchange, operates through two divisions. Solutions distributes liquid gas, fuels, biofuels and provides solar and hybrid energy systems to commercial and industrial customers across 11 countries. Mobility runs service stations in eight European countries under brands including Certa in Ireland and Certas Energy in the UK and France, alongside fleet payment and telematics services.

The consortium's initial £4.95 billion proposal in April was rejected by DCC's board as undervaluing the company. KKR and Energy Capital returned with a sweetened £5.7 billion bid in June that won the board's support before KKR raised the offer further to secure the deal.

The transaction is expected to close pending regulatory approvals. DCC's Nexora technology unit, which could trigger an additional payout for shareholders if sold for $800 million or more, adds a contingent value component to the deal structure.

This article is for informational purposes only and does not constitute investment advice.