Acquisition of Distrilogie Complete
DCC PLC
31 January 2000
DCC Acquires Young Fast Growing European Distributor
of Computer Storage Products
DCC plc, the value added marketing and distribution group, announces the
expansion of DCC SerCom's IT distribution business through the acquisition of
Distrilogie S.A, a young fast growing specialist value added distributor of
computer storage products based in Paris with offices in Madrid, Lisbon and
Milan.
DCC has acquired a 55% shareholding in Distrilogie from four of its senior
executives for a cash payment of EUR 9.3 million. Their remaining 45%
shareholding in Distrilogie is subject to put and call options exercisable by
DCC or the executives on a phased basis over the three years ending 31 March
2003. The price payable for the balance of their holding will be based on a
multiple of between 8.5 and 9.5 times Distrilogie's earnings after tax but
will not exceed EUR 28.8 million and is payable in cash.
Distrilogie has a record of strong sales and profit growth. Its management
accounts for the year ended 31 December 1999 show sales growth of 83% to EUR
67 million and operating profit growth of 101% to EUR 3.6 million. Its net
assets at 31 December 1999 were EUR 4.8 million with net debt of EUR 7.2
million.
Jim Flavin, Chief Executive & Founder of DCC, said:
'DCC SerCom's IT distribution businesses, Micro P and Gem in Britain and
Sharptext in Ireland, are continuing to achieve fast growth in revenue and
profits. The acquisition of Distrilogie should further enhance the growth
prospects of this division and is in line with our stated objective of
expanding our IT distribution business into Continental Europe.
Distrilogie's focus on the fast growing computer storage market offers
significant opportunities for future growth, especially in the internet
infrastructure market. We plan to grow Distrilogie aggressively as a
pan-European business and to exploit geographic and product synergies with
Micro P, Gem and Sharptext.'
Computer storage products are the hardware devices and the associated software
which are used to store and manage information on computer systems. The demand
for computer storage products is growing dramatically, fuelled by:
* the phenomenal growth of the Internet which requires the storage of vast
amounts of data, including text, digital images and video online;
* the growth of E-Commerce requiring companies to store more information,
including product catalogues online;
* the huge volumes of e-mails sent and stored on a daily basis; and
* the continual drive to automate business processes through the deployment of
Enterprise Resource Planning Systems, Document Imaging Systems and Data
Warehousing which have substantial storage requirements.
Distrilogie has distribution agreements with many of the industry leading
brands in the storage systems market including IBM, Sun, Exabyte, Veritas,
Seagate, StorageTek, Legato and Tandberg. The company has concentrated on the
higher end of the storage market and many of the products which it sells are
technically complex. Its highly skilled and experienced sales force adds value
by providing a significant element of technical support to its customers who
are typically computer dealers and value added resellers. Distrilogie employs
68 people.
DCC SerCom's IT distribution subsidiaries made operating profits of EUR 15.0
million on sales of EUR 355 million in the year ended 31 March 1999,
representing 24% of DCC's total operating profits. In the first six months of
the current financial year operating profits in IT Distribution increased by
35.2%.
For reference:
Tommy Breen
Managing Director, DCC SerCom
Michael Scholefield
Investor Relations Manager
Tel: + 353 1 2831011
DCC Web site: www.dcc.ie
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