DCC has reached an agreement to acquire British Gas LPG, Centrica’s liquefied petroleum gas (LPG) business, for £41.1 million (approximately 64.5 million Euros) in cash.
The sale of the business comes after a strategic decision by Centrica to focus on direct customer relationships in its core businesses, whereas a large portion of the LPG cylinder business operates through third party retailers.
DCC is already one of the leading companies in the LPG market in Britain and Ireland, operating under the Flogas and Alta Gas brands. The acquisition of British Gas LPG will double DCC’s share of the British market to 21%, making it the second biggest LPG company in Britain.
In the year ended December 31 2001, British Gas LPG generated operating profits of £2.3 million on turnover of £54.1 million. For the eight months to August 31 2002, unaudited operating profits were £2.9 million. The business had net assets at 31 August 2002 of approximately £40 million net of debt of £2.1 million.
The assets being transferred consist mainly of bulk tanks at customers’ premises, cylinders, road tankers, 23 depots, an operations centre in North Wales and a commercial centre at Witney in Oxford.
Consultations with British Gas LPG employees and trade unions are now taking place. Centrica anticipates that the transaction will be completed by the end of November 2002.