DCC, the Irish marketing and business support services group, will purchase the home entertainment and distribution company Pilton, for €42.5 million.

Pilton is a holding company for NCV Distribution Limited, VHS Distribution Limited and Belfast-based CGS Distribution Limited.

Under the terms of the sale, DCC will initially pay cash of €22.5 million. Three additional payments will be made over the following three years up to a maximum of a further €20 million, it said yesterday.

The sale is subject to clearance from the Competition Authority.

Pilton was formed in 1980 when NCV entered the video distribution business. The company's main shareholder is the family interests of accountant Nicholas Furlong, who has led its development. He will remain as its managing director.

Following the purchase, Pilton will become part of DCC's IT distribution division and will be complementary to the group's Gem Distribution subsidiary, which distributes entertainment and consumer digital products to the retail sector in Britain.

Commenting on the acquisition, DCC chief executive Jim Flavin said that Pilton would build on DCC's position as a leading distributor of entertainment and consumer digital products to the retail chain in Britain.

"The acquisition of Pilton will expand the product range and retail market reach of DCC's IT distribution division within the growing market for entertainment and consumer digital products," he said.

DCC's retail channel in Britain accounted for 42 per cent of the division's profits in the year to the end of March 2005.

In the last financial year, Pilton had sales of €72 million and reported pretax profits of €6.1 million.

It has achieved strong growth in recent years on the back of the expanding home entertainment market, in particular the growth in DVD sales. It has net assets of €16.2 million and employs 109 staff.