UK: DCC Energy Acquires Cooke Fuel Cards
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Wednesday, 07 January 2009 |
DCC, the publicly quoted services conglomerate, has acquired the
fuel-card business of Cooke holdings for €10.1m to expand its foothold
in the energy sector.
The business sells about 105 million litres of motor fuels a year through fuel cards, which are similar to debit or credit cards, marketed under a number of brands, including BP, Shell, Diesel Direct and Texaco.
DCC sells about 270 million litres of fuel in Britain to about 5,000 firms which operate commercial vehicle fleets. It first entered this area four years ago through the purchase of Leeds-based Fuel Card Group.
Tommy Breen, chief executive of DCC, said: "The acquisition of Cooke Fuel Cards will significantly increase the scale of DCC's fuel card business and further strengthen our relationships with our key suppliers."
Analysts also welcomed the deal, which was priced at a relatively low 3.5 times last year's operating profit of €2.9m. Gavin Kelleher, an analyst with Merrion Capital, said: "This is a business that DCC have said they wanted to grow.
"You'd expect the group will be able to scrape out cost and sales synergies and create a decent return on the investment." Cooke Fuel Cards, which is based in Burnley in the north of England, employs 38 people and will be integrated with DCC Energy's existing fuel-card operations.
DCC's Energy arm -- the group's largest division, which is focused on oil and liquefied petroleum gas sales and distribution -- made up over a third of DCC's total operating profits of €60.6m for the six months to the end of last September.
PetrolWorld 070109
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