Distribution giant Exertis is set for a potential sale as its FTSE 100-listed parent refocuses on its energy business.
LSE-listed DCC this morning announced it has begun preparations for the sale of its healthcare arm, and will review strategic options for DCC Technology “within the next 24 months” (see clip below).
DCC Technology is the more formal name for Exertis, a £4.8bn-revenue IT and consumer tech distributor with presence across Europe and North America.
DCC now plans to focus on its energy business, which generates nearly three-quarters of its operating profits.
The strategy will “simplify the group’s operations, maximise shareholder value and accelerate the growth of each of the group’s three divisions”, the conglomerate claimed.
Exertis a “high-quality business”
When it comes to potential trade buyers, with a couple of obvious exceptions such as TD Synnex and Ingram (as well as European giant ALSO), few distributors boast the scale to buy Exertis.
In interim results also released this morning, DCC Technology saw revenues rise 1.2% year on year to £2.3bn in the six months to 30 September 2024.
The UK contributed £752m of that total (down from £756m a year earlier), with North America chipping in £936m, France and Ireland £133m apiece, and the ‘Rest of the World’ £366m.
The news follows Exertis’ decision to morph from a broadliner to a specialist distributor in the UK B2B space (following the loss or imminent loss of big PC contracts with Dell and Lenovo).
In a stock exchange announcement this morning, DCC CEO Donal Murphy described its Healthcare and Technology divisions as “high-quality businesses, led by strong, entrepreneurial management teams”.
“We are announcing decisive actions today to simplify our group, pursue our largest growth and returns opportunity and unlock substantial shareholder value, from positions of strength,” Murphy stated.
“Our actions are designed to ensure that these businesses and our people have the best opportunity to grow and progress.”
In a separate press statement, Tim Griffin, CEO of Exertis IT, said: “We’re excited by the opportunities that DCC’s strategic update presents. This is a great opportunity for our Technology division as we explore the possibility of new ownership.
“Our focus remains as ever on delivering for our customers and vendor partners. DCC’s strategic update provides another opportunity for us all to grow and progress, and we’d like to reassure our customers and vendors of our commitment to them, to adding value, to delighting all our partners and enabling their success.”
