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Applegreen pulls back from UK petrol stations sale

Linda Stewart — Mon, 14 Mar 2022 11:19:23 +0000

The petrol forecourt retailer was acquired 12 months ago by its co-founders and US private equity giant Blackstone in a €718 million deal, and last June said it had put its portfolio of 98 UK stations on the market, after receiving a number of approaches from interested parties.

The company’s UK service stations on motorways and sites operated by its majority-held Welcome Break were not part of the discussions.

The Irish Times has reported that the talks did not result in a deal. They said the business had exceeded expectations in the past year, with its food and coffee offering benefitting from much of the UK continuing to work from home, as motorway stations remained under pressure. The company has not commented on the report.

The UK petrol stations market has been the active focus of consolidation in recent years. Late last month, it emerged that US asset manager Fortress Investment Group is lining up a reported £5 billion (€5.97 billion) bid for Motor Fuel Group (MFG), the UK’s biggest operator of independent petrol stations with almost 1,000 forecourts. MFG is owned by US private-equity firm Clayton Dubilier & Rice.

Applegreen, which was founded in 1992 with one petrol station in in Ballyfermot in west Dublin and ultimately floated on the stock market in 2015, was taken private last March in a Blackstone-backed deal that has resulted in its founder, Robert Etchingham, and long-standing executive Joe Barrett retaining more than 40 per cent of the company.

The group’s number of sites had trebled between its initial public offering to total 559 at the time the takeover deal was announced in late 2020, including 204 locations in Ireland, 164 in the UK and 191 in the US, a market it entered in 2014.

At the time the bid was announced in December 2020, Mr Etchingham and Mr Barrett said in shareholder documents that the business would be better off in private hands as it prepared for large investments in electric car charging facilities and US highway service areas.

The company’s independent directors at the time also unanimously recommended the takeover, highlighting the constraints in Applegreen borrowing heavily as a listed company, particularly amid Covid-19, to take advantage of “significant” growth opportunities.

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Applegreen in talks to sell UK sites

Julie Nash — Thu, 10 Jun 2021 17:05:09 +0000

Applegreen is said to be in negotiations to sell 98 of its UK filling stations – according to a report in Forecourt Trader. The negotiations do not include its trunk road, motorway or sites operated by Welcome Break.

The move dovetails with the company’s strategy to develop less, but larger locations – with an increased focus on the food-to-go offering and EV charging.

The talks are currently still in early stages and are unlikely to be concluded until later this year.

IFCR has asked if the move will include its five sites in Northern Ireland – but no response has been received as yet from the company.

Earlier this year – on 9th March – the court hearing to allow for a change of ownership, enabled the original owners Bob Etchingham and Joe Barratt, along with a consortium including B&J Holdings, and Blackstone Infrastructure, to revert the company to private ownership, with Etchingham and Barratt as CEO and COO respectively.

The deal was approved by shareholders on February 17, but required the sanction of the High Court in Dublin, where the company is based.

In February of this year, Applegreen agreed a lease on 27 service area sites on the New York State Thruway in the US. The Empire State Thruway Partners (ESTP) consortium agreed the conditional lease with New York State Thruway Authority in September 2020, Applegreen was a minority partner in ESTP, as previously reported by IFCR, further highlighting the company’s ambitious expansion plans.

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Applegreen surge ahead

Wendy McCague — Mon, 01 Oct 2018 09:56:09 +0000

Applegreen have been racing a head after their recent acquisition of motorway giant Welcome Break and they are showing no sign of slowing down.

The recent news that Applegreen has raised €175m to help fund its “transformational” purchase of a controlling stake in Welcome Break comes with welcome cheers from those in the company.

This is a positive step for the Irish forecourt operator and one which could see their business completely altered in the years to come.

Applegreen has said that it was buying Welcome Break, which operates petrol stations across the UK. The €362m deal will close in October.

They also announced that it had conditionally raised €175m before expenses through the proposed issuance of 28.7m ordinary shares, at a price of €6.08.

“We are delighted with the very strong support and encouragement received from existing shareholders and from new investors for the Welcome Break transaction and related placing,” Bob Etchingham, the chief executive of Applegreen, said speaking to the Times.

“This acquisition is transformational for our company in the strategically important UK market and we look forward to completion at the end of October.

“Building a wide and high-quality investor base in parallel with expanding our business across chosen markets are core objectives and this transaction and associated equity raise significantly advances that strategy.”

It has bought the stake from the NIBC European Infrastructure Fund for €361.8 million in a deal that requires shareholder approval. An extraordinary general meeting will be held on October, 24.

Welcome Break operates 24 motorway service areas, two trunk road service areas and 29 hotels in 35 locations in Britain.

It serves 85m customers a year, employs more than 5,000 people and last year generated revenues of £723.4m with adjusted earnings of £66.4m.

It is the second largest British motorway service area operator, behind Moto.

What next?

It has still not been announced if this deal will bring the Welcome Break brand to Ireland; however, it is undoubtedly a strong move from Applegreen.

Their recent profit increases and steady growth mean they can be presumed to continue expanding on their ambitions to take the brand global.

This is backed up by the fact Applegreen completed two of its most significant acquisitions last year.

It secured Brandi, a forecourt retail operation based in South Carolina, United States, which had 34 petrol stations and eight standalone Burger King restaurants.

The company also bought Carsley, which owned seven petrol stations in the UK.

This could be a sign of things to come as Applegreen prepares to take the Irish forecourt attitude and mentality into a new era.

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