DCC PLC (LSE:DCC) has struck a £1.05 billion deal to sell its healthcare division, a move analysts say marks a defining moment in the company’s plan to simplify its structure and sharpen its focus on its higher-growth energy business.
The FTSE 100-listed services group, which is based in Dublin, confirmed on Tuesday that it would sell the unit to HealthCo Investment, part of private equity firm Investindustrial. Completion is expected in the third quarter of 2025, pending regulatory approval.
The disposal values DCC Healthcare at an enterprise value-to-EBIT multiple of around 12 times, well above the group’s current trading multiple.
Analysts at Stifel said the deal was a “crucial step” in reshaping the business around its energy division, which it sees as the highest-returning growth engine. They also described the sale price as strong, given the macroeconomic backdrop.
DCC Healthcare contributed about 13% of group operating profit last year, delivering £88.1 million on revenues of £859.4 million. The division employs more than 3,000 people across 11 manufacturing and commercial sites globally.
DCC expects to receive around £945 million in cash from the deal. Stifel said the proceeds should allow for “notable capital returns” to shareholders post-completion.
Chief executive Donal Murphy said the transaction would create immediate value and allow DCC to push ahead with building a market-leading multi-energy platform. The healthcare unit, meanwhile, will move forward under new ownership after nearly two decades of organic and acquisition-led growth within the group.
DCC first signalled its intention to exit the healthcare sector in November following a strategic review. The company reported group revenues of £19.9 billion in the year to March 2024.
The deal was greeted with a collective 'meh' from the market, with the shares falling 2.5% to 4,860p.