Heating Oil Supplier News

DCC to expand its oil distribution businessin Britain, the Isle of Man and the Channel Islands

DCC plc has reached conditional agreement with Rontec Investments LLP (”Rontec”) to acquire certain oil distribution assets currently owned by Total in Britain, the Isle of Man and the Channel Islands (”the Acquired Businesses”). Rontec reached conditional agreement in June 2011 to purchase the Acquired Businesses as part of a larger transaction with Total. DCC’s acquisition is conditional on Rontec completing its transaction with Total, which is expected to take place in late 2011.

The Acquired Businesses together employ 550 people and sold 1.5 billion litres of fuel in 2010.  The key components of the Acquired Businesses are:

·     The trade, fixed assets, stock and goodwill of Total Butler, a transport, commercial and home heating oil distribution business with sales volumes in 2010 of 670 million litres.  Total Butler has a network of 40 depots across England and Wales and a fleet of circa 200 leased delivery vehicles.

·     Contracts to supply transport fuels to circa 300 dealer owned dealer operated retail service stations (currently branded Total).  Volumes sold under these contracts in 2010 amounted to 710 million litres. 

·     The entire issued share capital of Total’s oil distribution and retail service station businesses on the Isle of Man and the Channel Islands.  In 2010, together these businesses sold 120 million litres of fuel. 

The expected total consideration payable by DCC for the Acquired Businesses together with the estimated value of stock to be acquired is €67 million (Stg£59 million), and will be satisfied in cash at completion. The goodwill at completion will be approximately €43 million (Stg£37 million). 

Tommy Breen, Chief Executive of DCC plc, said today:

“This acquisition represents a further significant step forward in DCC’s growth strategy in oil distribution in Britain.   It will considerably extend DCC Energy’s presence in England and Wales and will also enhance our ability to serve customers throughout the market.”

Total has signed a sale and purchase agreement to sell most of its Marketing assets in the United Kingdom, the Channel Islands and the Isle of Man to Rontec Investments LLP, a consortium led by Snax 24, one of the leading independent forecourt operators in the UK.The assets included within this agreement consist of Total’s UK retail network, comprising 810 Total-branded service stations, its Butler heating oil business, the associated logistics infrastructure, as well as its Channel Islands and Isle of Man businesses.The Rontec Investments consortium comprises Snax 24, one of the leading independent forecourt groups in the UK; Grovepoint, a London-based, independent principal investment firm; and Investec, an international specialist bank and asset manager.

This transaction, which is expected to complete later in 2011, is in line with the Group’s strategy of rationalising its downstream portfolio in Europe. The sale process for Total’s refining assets in the UK is ongoing

In addition to its exploration and production operations, Total will retain a direct market presence in the UK through its lubricants, aviation fuels, special fluids and chemicals businesses.

The Sunday Times has reported that DCC has made an offer for Total SA (FP)’s U.K. This would include around 800 petrol stations and the heating oil business.

The paper also stated that Total received offers from Harvest Energy (backed by private equity firm Ion Equity and Greenergy International Ltd.

There is no formal press release from DCC or Total at this point.

It was reported in The Independent over the weekend that Total has put its estate of almost 500 forecourts up for sale. They have confirmed that the plan to keep its aviation and lubricants businesses, but that would imply that Total Butler might also be sold.

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TOTAL BUTLER has announced the launch of TOTAL BUTLER Online, their new online ordering and payments service. The site allows customers to place orders, request quotations, pay and sign up to other services 24 hours a day, 7 days per week.

This is inevitably the way forward and everyone in the industry accepts that online sales is the future. Independent heating oil distributors need to recognise this and either develop their own ecommerce site or use existing platforms like WhichOilSupplier.