(Reuters) - Ireland-based DCC Plc (DCC.L) plans to buy Canada-based musical instruments distributor Jam Group for an enterprise value of $170 million (£129.4 million), the company said on Thursday, as it continues to diversify its business through acquisitions.
Shares of the company, whose services range from distributing oil to making The Body Shop's body butters, fell more than 6 percent in early trading and was at the top loser in the UK bluechip index .FTSE.
DCC also said it planned to place up to 8.9 million new shares with institutional investors and use the proceeds to drive its acquisition strategy.
DCC said its first-half profit would be in line with its expectations, helped by acquisitions.
The company, which operates in 17 countries, said its group operating profit would be well ahead of the prior year, driven by acquisitions completed in the prior year, and that trading across each division was also in line with expectations.
“The acquisition of Jam significantly strengthens DCC Technology’s position in the North American market,” Chief Executive Donal Murphy said in a statement.
In February, DCC bought Elite One Source Nutritional Services, with an enterprise value of $50 million, marking its entry into the U.S. healthcare market.
The company announced its first acquisition outside its core markets in April 2017 when it agreed to buy Shell’s (RDSa.L) liquefied petroleum gas (LPG) business in Hong Kong and Macau for about 120 million pounds.
DCC shares were trading down 4.6 percent at 335 pence at 0710 GMT.
Reporting by Justin George Varghese in Bengaluru; Editing by Bernard Orr and Gopakumar Warrier