Investing.com -- Irish energy distributor DCC said on Friday it had agreed to sell its Nexora technology division to private equity firm One Equity Partners in a deal valuing the unit at $725 million, a sale that could lift the payout to shareholders in its pending $-billion takeover by KKR and Energy Capital Partners.
DCC Energy plc said the $725 million figure is Nexora's total enterprise value on a cash-free, debt-free basis. The sale needs customary regulatory approvals and is expected to complete on or after March 1, 2027.
The sale feeds into the takeover of DCC by Dragon Bidco Limited, a newly formed company owned by funds advised by Energy Capital Partners Management, LP and Kohlberg Kravis Roberts & Co. L.P. and their affiliates.
The two sides announced that deal on July 27, and DCC shareholders voted to approve it on September 18.
Under the takeover terms, DCC shareholders get 6,525 pence in cash per share. They can also receive up to 125 pence more per share if the conditions tied to the Nexora sale are met, or waived by Bidco, before July 31, 2027.
The extra payment depends on the net proceeds from the sale. If the proceeds are between $650 million and $800 million, the extra payment falls between zero and 125 pence per share on a straight-line scale. If they are above $800 million, it is capped at 125 pence per share.
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Based on a March 1, 2027 completion and no leakage of value to anyone outside the DCC group, DCC expects net proceeds of $701 million. It said that would mean an extra payment of 42 pence per share.
DCC said both figures are estimates. The final amounts will be set after the sale completes, and an announcement will follow.
If the conditions are met on or before the takeover's effective date, DCC said the extra payment will be made within 14 days of that date. If they are met later, it will be paid within 14 days of that point.
DCC warned there is no guarantee the sale will complete, and no assurance that any extra payment will become payable. If any of the conditions are not met, or waived by Bidco, by July 31, 2027, the extra payment will be zero.
"Nexora has been an important part of the DCC Group for many years and has built a strong market position through the expertise and commitment of its people," chief executive Donal Murphy said in the statement.
He said One Equity Partners is "well placed to support Nexora's continued growth, investment and long-term development."
One Equity Partners is a middle-market private equity firm focused on industrial, healthcare and technology sectors in North America and Europe. It was founded in 2001 and spun out of J.P. Morgan in 2015.
Original Article
DCC Energy to sell Nexora unit for $725 mln
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