Top 50 Indie Applegreen is set to increase its stake in the UK market with the acquisition of a majority stake in motorway service area (MSA) operator Welcome Break, in a €361.8m (£321m) deal.

The deal will make Applegreen one of the big three MSA operators in Britain, and is its largest acquisition to date. Welcome Break operates 24 motorway service areas, two trunk road service areas and 29 hotels across 35 locations in the UK, with around 85 million customers per year. It currently employs more than 5,000 people.

Applegreen has award-winning MSAs in Ireland, and has applied to build new MSAs in England, but it does not currently have any motorway services among its estate of British sites.

Applegreen said it had entered into contracts to acquire a 55% holding in Welcome Break.

The deal, which constitutes a reverse takeover of the company, will require approval from Applegreen’s shareholders. Trading in Applegreen’s shares will be suspended on the AIM in London and the ESM Market in Dublin with immediate effect, until the admission document is published. This expected to expected be done in September.

The transaction will be backed by a new €300m debt facility and a proposed equity fundraising of at least €100m.

“Welcome Break is a fantastic business, it has led the way in providing the very best food and beverage facilities on the UK motorways,” said Applegreen chief executive Bob Etchingham.

“We were attracted to Welcome Break because of the strength of its franchise, the excellent management team and the committed staff at each of its 35 locations.”

Applegreen has also entered into a separate conditional agreement with AIP, which manages the remaining shareholder in Welcome Break, that will see Applegreen sell to AIP an 8.6% stake in Welcome Break for €56.5m. Under the terms of the AIP agreement, Applegreen will be responsible for Welcome Break’s strategy and operations, and will share general governance rights with AIP.

The agreement also provides that Applegreen will transfer its existing UK motorway service areas and trunk road service area assets to Welcome Break, along with its UK development pipeline assets, in exchange for a further £120m of equity in Welcome Break. Meanwhile, AIP will invest a further £80m into Welcome Break, to repay its junior debt.

If the AIP agreement goes ahead, and is approved by shareholders, Applegreen will hold a 50.01% stake in Welcome Break.

“This is a transformational transaction in the UK MSA sector, and I am sure that the combination of the Applegreen service area operations in the UK with those of Welcome Break, and combined management capabilities will help build further on the consistent and strong earnings growth seen by both businesses over the past decade,” said Darren Kyte, chairman of Welcome Break Group.