DCC acquires AV specialist Jam in significant North American expansion move

Acquisitions, International news, Technology, US News | Thu 27 Sep | Author – Business & Finance
Shaun Murphy, Managing Partner, KPMG; Donal Murphy, CEO, DCC; and Ian Hyland, Business & Finance at the Business & Finance Awards 2017 where DCC won Company of the Year.

DCC, the international sales, marketing and support services group, has announced the acquisition of the Jam Group of Companies by its DCC Technology Division.

It is the company’s second acquisition in North America following the purchase of New York-based audio video distribution specialists, Stampede, in July.

The Montreal, Canada-headquartered company is a specialist sales, marketing and services business, serving the professional audio, musical instruments and consumer electronics product sectors and has an initial enterprise value of US$170 million (€145m). The acquisition is in line with DCC Technology’s strategy of extending geographic footprint and product range and broadening its base of customers and suppliers. DCC expects the acquisition to be 4.5% EPS accretive[1] from completion and to generate a return on capital employed of c. 15% in the first full year of ownership.

Donal Murphy, Chief Executive of DCC plc, said today:

The acquisition significantly strengthens DCC Technology’s position in the North American market. DCC Technology now has approximately US$600 million in revenue in North America with a strong, service-led, specialist focus on professional audio and visual, musical instruments and consumer electronics. The growing and fragmented nature of these markets will provide DCC Technology with further opportunities for development in the coming years.

DCC Technology, which principally trades under the Exertis brand, provides a broad range of consumer and business technology products and services to customers across the consumer, B2B and enterprise markets. It now operates in 16 countries with its principal operations in the UK, US, Canada, Ireland, France, Sweden and the United Arab Emirates.

Jam Product Lines

Jam’s product sector and channel specialisation includes marketing and sales support, in-house technicians providing technical support, after-sales, repair and warranty repair services, in-house graphics and print services and the provision of white-label e-commerce platforms for smaller retailers and resellers.

The business distributes in excess of 500 third party brands, with the majority of these relationships being exclusive, from leading vendors such as Allan & Heath, Focusrite, Harman, Incipio and Marshall and also develops and sells a range of complementary own-brand products.

Jam sells to approximately 6,000 B2B and retail customers, including large retailers, e-tailers and specialist retailers and resellers across North America.

Jam’s operational footprint includes a Canadian sales office and national distribution centre, with a further national distribution centre and six sales offices across the US. The business recorded revenue of US$323 million in the year ended 30 April 2018 and employs approximately 570 people.

The company said that Jam’s service capability is consistent with DCC Technology’s increasing focus on positioning itself as a specialist service partner for customers and suppliers, providing extensive brand reach, market access and simplifying the complex supply chain of its chosen sectors.

[1] Based on DCC’s financial year ended 31 March 2018.