DCC has announced the sale of its healthcare division to HealthCo Investment Limited on a cash-free, debt-free basis.

The deal offered by the subsidiary of Investindustrial Advisers values the healthcare division of the Dublin-based firm at £1.05bn.

DCC said the proposed transaction is a "material step" in the group’s strategy to simplify operations, maximise shareholder value and accelerate the growth of its energy business.

The energy division is the group’s largest and highest returning division.

DCC added that, as previously communicated, the board anticipates the surplus cash that will be raised from the simplification of the group will be returned to shareholders.

The transaction represents a multiple of 12 times of its adjusted operating profit.

Chief executive at DCC, Donal Murphy, said: "The disposal of DCC Healthcare is a material step in simplifying DCC's operations and focusing on our high growth, high return, energy business. Our strategy will continue to build DCC as a market-leading multi-energy business. The profitable sale creates immediate value for our shareholders, and we are confident that Investindustrial will take DCC Healthcare forward in the best long‐term interests of its employees, customers and suppliers."

Investment director at AJ Bell, Russ Mould, added: "News the Irish conglomerate DCC is selling its healthcare division gave the stock a bit of a bump as the deal promises a meaningful injection of cash, much of which looks set to be returned to shareholders. It says the deal highlights value within the business and helps simplify its operations.

"The move was not a surprise having been widely telegraphed for several months and focus will now turn to its progress on plans to sell the technology manufacturing and distribution arm.

"The company wants to focus all of its attention on the energy business, which enjoys the strongest returns and accounts for the majority of its revenue. The business is arguably quite well-positioned for the uncertain pace of the transition away from fossil fuels, with expertise which spans areas such as liquid gas, solar energy and service stations."

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