Applegreen buys into 23 plaza forecourts in US
Applegreen will pay $37.6m (€33.5m) to acquire a minority stake in a group of 23 forecourt-fuel plazas in Connecticut highways between New York and Boston in the US, in a small transaction that nonetheless underlines its plans to expand out its operations in the US.
When it sold its shares at €3.80 for the first time on the Irish stock market over four years ago, Applegreen had downplayed its ambitions in the US where it had a small operation, focusing instead on the opportunities to expand its network of fuel-and-food forecourts by building out new sites through acquisitions in Ireland and the UK.
The shares have, however, been overshadowed in recent times as fears over a crash-out Brexit and the drop in the value of sterling have potentially weighed on its earnings.
Yesterday, the shares fell over 4% to €5.08, valuing the company at €612.7m.
Applegreen said that it is paying $37.6m for a 40% stake in a group of investors, which includes IST3 and TD Greystone, to acquire the 23 plazas in a company called CT Service Plazas.
“Project Services LLC has the exclusive rights along the routes in the state under a concession agreement with the Connecticut Department of Transport which currently has 25 years remaining, with the potential to extend for a further 10 years,” Applegreen said in a statement.
“The plazas offer essential services including fuel, quick-service food and beverage, retail, restroom [bathroom], and other facilities, operating 24 hours a day and 7 days a week. Approximately 91% of revenue generated by CT Service Plazas is from long-term anchor tenants including McDonald’s, Dunkin’ Donuts, Subway and Alliance Energy,” it said.
The company said it has an eye on expanding its range of tenants.
“The transaction supports Applegreen’s strategic objective of growth in north America and continues to develop its stated ambition of reducing fuel dependency through the addition of significant food and beverage operations,” it said.
The deal will dilute earnings this year but contribute to next year’s earnings, it said.
