The oil distribution, tech and health and beauty products conglomerate, on Thursday said it expected the purchase of Canada-based Jam, which it said has an enterprise value of around £130mln, to generate a return on capital employed of around 15% in the first full year of ownership and boost earnings per share by 4.5%.
"The acquisition of Jam significantly strengthens DCC Technology's position in the North American market. DCC Technology now has approximately US$600 million in revenue in North America with a strong, service-led, specialist focus on professional audio and visual, musical instruments and consumer electronics,” CEO Donal Murphy said in a statement.
“The growing and fragmented nature of these markets will provide DCC Technology with further opportunities for development in the coming years,” he added.
DCC also said it had raised gross proceeds of around £606mln - before expenses - from a placing of 8.9mln new shares at a price of 6,800p with institutional investors. It plans to use the proceeds to further extend its geographic footprint and product range, strengthening its partnership with existing suppliers while also broadening its base of customers and suppliers.
The placing shares represent around 10% of DCC's issued share capital, prior to the placing, DCC said.
The company, which operates in 17 countries, also said that its first-half profit would be in line with its expectations and well ahead of the same period a year ago, driven by the impact of previous acquisitions and good trading across its divisions.
DCC reiterated its belief that the year ending 31 March 2019 would be another year of “profit growth and development" for the company.
Shares in DCC were 4.3% down at 6,995p in late afternoon trade.
-- updates lead and summary to reflect completion of placing, commentary on placing and share price --