Applegreen has reached agreement to buy a 34-forecourt group based in Columbia, South Carolina, in the US.
Under the terms of the deal, Applegreen will acquire the trade and certain assets of the Brandi Group for $5.4m (inclusive of working capital), and a US institutional real estate investor will acquire certain property assets for $70.1m.
At completion of the transaction, Applegreen will enter into a long-term agreement with the real estate investor to lease the property assets. Completion of the transaction is subject to a number of conditions and is expected to complete in the fourth quarter of 2017.
The business comprises a total of 42 sites located in or close to the city of Columbia, the state capital of South Carolina. Thirty four of the sites are petrol filling stations which incorporate 11 Burger King restaurants and a number of other food offers including Subway and Blimpie. In addition, the business operates eight stand-alone Burger King sites.
The business currently generates an adjusted EBITDA of about $3m and is expected to be earnings accretive in 2018. The purchase price of $5.4m is being funded from existing resources.
The current owner has committed to working with the existing management team for the first 12 months to ensure an orderly transition of operations to Applegreen.
Chief executive Bob Etchingham said: “We are delighted to announce our first major acquisition in the US which represents a significant milestone for our business. We consider the Brandi Group to be an excellent fit for our business given the attraction and convenience of its locations centred in the city of Columbia together with the significant component of food-to-go offers that exists within the estate.
“We believe this acquisition represents an opportunity to establish a significant presence in this market while also providing the potential for us to leverage our retail experience in this sector to enhance the current offering. It also represents an ideal platform from which to further pursue our strategy for growth along the East Coast of the US.”