Applegreen Acquires Minority Stake In US On-Highway Service Plazas
Irish forecourt retailer Applegreen has announced that it has conditionally acquired a 40% holding in 23 on-highway services plazas in Connecticut, US.
Working with a number of investment groups, Applegreen entered into a securities purchase agreement to acquire JLIF Holdings US, and it's 100% subsidiary Project Services LLC which operates the Connecticut Service Plazas (CT Service Plazas).
CT Service Plazas is a well-established and fully re-developed service plaza business in the US, Applegreen said. The US group consists of 23 on-highway service plazas located in Connecticut across three heavily trafficked routes between New York and Boston.
The plazas, which operate 24/7, offer essential services including fuel, quick-service food and beverage, retail, restroom and other facilities. Approximately 91% of its revenues are from long-term anchor tenants including McDonald's, Dunkin' Donuts, Subway and Alliance Energy.
Last year the group reported EBITDA of approximately $14.5 million (€12.9 million) and pre-tax profits of $4.2 million (€3.7 million).
Important & Rare Opportunity
Applegreen said that the transaction was an important opportunity to access Motorway Service Areas in the US, adding that it will be 'operating from strategic locations with high barriers to entry for competitors’.
“This transaction represents a rare opportunity to acquire a high profile service plaza concession project in one of our core regions in the United States,” Applegreen CEO, Bob Etchingham, said, “significantly increasing our market presence in the North East and positioning the company for further growth in this key strategic market.”
The transaction is set to open up new and strategically valuable relationships, ‘with a variety of high-profile, large-scale, and quick-service restaurant brands’.
In addition, Applegreen expects the transaction to generate stable long-term earnings and growth opportunities.
The acquisition will be funded from existing group debt facilities.
It is expected to ‘slightly dilutive’ to earnings in its Full Year 2019 results, but Applegreen expects it to be accretive from 2020 onwards.
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click sign-up to subscribe to Checkout.