Applegreen, Ireland’s largest independent motorway service station group, has expanded its US footprint after acquiring a chain of filling stations in South Carolina.
The company has agreed to buy a chain of 34 filling stations around Columbia, South Carolina, at a cost of $75m (£58m). The business is being acquired by Applegreen under a sale and leaseback structure.
The agreement entails that the company pays $5.4m (£4.2m) for trade and certain assets of Brandi Group, and a US institutional investor will purchase property assets of the company for a total of $70.1m (£54m).
Once the transaction is complete, Applegreen will enter into a long term lease arrangement with the property investor for the sites.
Chief executive Bob Etchingham said the deal represents “a significant milestone” for the business and marks the group’s first major acquisition in the US.
Applegreen, which raised €91.7m in an IPO two years ago, has been operating in the US for three years with a portfolio of 13 petrol filling stations. The Brandi acquisition increases its US presence almost four-fold to 47 forecourts.
The new portfolio of filling stations also includes a significant ‘food-to-go’ offering with Burger King, Subway and Blimpie restaurants on some sites.
Jason Molins, an analyst at Goodbody, said: “The business is a good strategic fit for Applegreen given its attractive locations and a well invested asset base.”
Applegreen expects the deal to be earnings enhancing next year, with the acquired assets currently generating an adjusted earnings before interest, tax, depreciation and amoritisation of around $3m.
Last year, the company, which has more than 243 forecourt sites across the UK, US and Ireland, enjoyed an 11pc increase in earnings to €32m. In June, it paid a maiden dividend of 1.25c per share.
