DCC to buy fuel recycling firm for €10.8m

DCC has further expanded its presence in Britain by paying an initial £9.6 million (€10.8m) for the Nottinghamshire-based recycling business, Oakwood Fuels.

The deal was done via the Irish support services group’s subsidiary, DCC Environmental Britain, and ups the group’s share of the hazardous waste management sector in Britain.

The €10.8m price tag is only an initial consideration. DCC may well end up paying more — up to a maximum of €22.5m, in fact — depending on Oakwood’s profits in its next three financial years.

Oakwood’s area of expertise is the collection of waste lubricant oil and hazardous waste — mainly from the automotive services sector — and conversion into processed fuel oil, which is then sold on to customers for a variety of uses including road surfacing, furnaces, large boilers, power stations and industrial and agricultural drying.

The company employs 105 people and generated operating profits of €2.5m in its last financial year — up to the end of last September — along with revenues of €10.5m.

The value of its net assets, at that time, stood at €1.9m.

“The acquisition will enable DCC Environmental’s existing British businesses to offer new services to their customers and the enlarged business to leverage an expanded customer list,” DCC group chief executive, Tommy Breen, said.

Mr Breen added that the purchase of Oakwood will broaden DCC Environmental’s service offering into “additional complementary waste streams” in Britain and “capitalise on the trend towards more sustainable waste management and, in particular, increased waste recovery and recycling”.

Last month, DCC reported a 15% increase in annual pre-tax profits and growth across each of its five operating divisions, even in the light of a continuing difficult economic and trading climate. At the announcement of those results, DCC’s management said it would continue to grow both organically and through acquisition, adding that it had a strong enough balance sheet to spend big if necessary.