DCC Significantly Expands Presence in U.S. LPG Market

DCC plc (Dublin, Ireland) announced Jan. 5 that it has expanded its presence in the U.S. LPG market with its recently completed acquisition of United Propane Gas (UPG; Paducah, Ky.).

UPG is DCC LPG’s largest acquisition since initially entering the U.S. market in April 2018 and follows the material bolt-on acquisitions of NES Group in September 2020 and Pacific Coast Energy in April 2019. It is a further significant step in the execution of the strategy to build a business of scale in the highly attractive and growing U.S. LPG market. The acquisition considerably expands DCC LPG’s geographic presence from 14 to 21 states, nearly doubles its customer base to more than 230,000 customers, increases its number of employees to more than 800, and is said to create the sixth-largest business in the U.S. LPG market, based on volume.

UPG markets, sells, and delivers LPG and related products and services to residential, agricultural, and commercial customers in 13 Midwest and southern states, with a strong presence in Kentucky, Tennessee, and Alabama. Headquartered in Paducah, Ky., the business employs some 360 people, has more than 110,000 active customers, and sells approximately 120,000 tonnes of LPG annually from 80 operating locations. About two-thirds of its annual volume is sold to residential customers, with the balance going to agricultural and commercial customers.

Together with a recent smaller bolt-on acquisition completed in Colorado, the combined enterprise value of the transactions was $145 million. The consideration was paid in cash on completion.

Donal Murphy, chief executive of DCC plc, commented, “The acquisition of UPG is another exciting development for DCC and is consistent with our ambition to build a substantial presence in the global LPG market. Since our initial entry into the U.S. LPG market in April 2018 we have now committed approximately $445 million of acquisition capital in building DCC Propane into the sixth largest business in the market. Building a business of scale in the U.S. LPG market provides DCC with a strong platform to provide our customers with their energy needs now and into the future.”

SOURCE: The Weekly Propane Newsletter, January 7, 2021. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.