DCC PLC (LSE:DCC) announced the purchase of US distribution company Almo Corporation in its largest acquisition deal to date, based on an initial enterprise value of US$610mln (£462mln).
The sales, marketing, and support services group said the acquisition will more than double the size of the North American business of its DCC Technology subsidiary.
DCC said it has now committed around £550mln to acquisitions in the financial year ending 31 March 2022.
Almo is one of the largest specialist Pro AV businesses in the US and is a leading national distributor of consumer appliances, consumer electronics and lifestyle products, DCC said. The business is headquartered in Philadelphia and employs approximately 660 people across the US.
In the year to 30 April 2021, Almo recorded revenues of US$1.3bn and underlying EBITA of US$75mln. Its gross assets at 30 April 2021 were US$409mln.
By combining Almo's Pro AV offering with DCC Technology's existing Pro AV operations, the acquisition will create the leading, specialist, Pro AV business in North America, DCC said.
It said the acquisition will increase DCC Technology’s revenue in North America to US$2.3bn, on a pro-forma basis, with adjusted EPS accretion of around 10% in first full year of ownership.
The acquisition is expected to generate a return on capital employed of 15% within three years.
READ: DCC says all of its divisions delivered growth in first half as revenue jumped 27%
Donal Murphy, chief executive of DCC, said: “The acquisition of Almo and other recent acquisitions in DCC Technology and DCC Healthcare are consistent with our ambition to really scale our operations in these higher growth sectors.
“We are very pleased with the group's progress since we first entered the North American market in 2018, where we have built substantial and successful businesses across the healthcare, technology and energy sectors. We have great opportunity for future expansion, given the platforms we've created, the attractive growth dynamics and the scope for consolidation."
DCC shares climbed 6.36% to 5,856.00p in early trade.