By Paul Sandle
LONDON (Reuters) – Dublin-based conglomerate DCC said on Tuesday it would put its healthcare division up for sale and look at options for its technology business in order to focus on energy, its biggest and fastest growing unit.
Chief Executive Donal Murphy said DCC had been a diversified group since it was founded more than 30 years ago, but that its biggest opportunity was now in the energy transition.
“We have decided it is in the best interest of shareholders to focus solely on the energy business,” he told Reuters.
Shares in DCC jumped as much as 18% to 5,865 pence as analysts at Jefferies said the disposal plan was the “hard catalyst the equity story needed”.
Jefferies had said in June that healthcare and technology added an extra layer of complexity to an already changing energy business.
Murphy said DCC Healthcare’s patient health and consumer health divisions would be attractive to both strategic and private equity investors.
The unit had revenue of 415.1 million pounds ($531.5 million) and operating profit of 38.1 million pounds in the six months to Sept. 30.
DCC’s tech business had operating profit comparable to healthcare on higher revenue of 2.3 billion pounds, split between a lower margin business selling into retail and reseller channels and a specialist audio-visual business.
“It’s likely those businesses would probably sell to different parties ultimately,” Murphy said.
He said DCC’s energy business was well placed to benefit from the energy transition given its focus on the off-gas grid segment. “We have always been really in decentralised energy,” he said, adding that its customers saw opportunities in solar and wind generation.
DCC Energy, which serves about 10 million customers, represents 74% of operating profit and delivers an 18.7% return on capital, the highest of the three division, the company said.
($1 = 0.7810 pounds)
(Reporting by Prerna Bedi and Aby Jose Koilparambil in Bengaluru; Editing by Varun H K and Mark Potter)
