DUBLIN and ALLENTOWN, Pa. — Irish forecourt retailer Applegreen has reached an agreement to acquire a leasehold interest in certain convenience-store assets of Lehigh Gas Wholesale LLC, CrossAmerica Partners LP (CAP) and its affiliates in Michigan, Minnesota and Wisconsin. The assets consist of 46 gas stations with c-stores with most concentrated in the Minneapolis and St. Paul metropolitan area.
Under the terms of the transaction, Applegreen will enter into an initial 10-year lease agreement with the lessor to lease the property assets and begin trade at the stations. It has negotiated terms and extension options “to allow for a low-risk expansion of Applegreen's presence in the United States,” the company said.
*Applegreen is No. 96 in CSP’s2019 Top 202 ranking of c-store chains by number of U.S. retail outlets. CrossAmerica is No. 106.
Applegreen is not paying any upfront consideration, and it expects the transaction to be accretive to earnings in 2019, it said. The company said it will fund any additional capital investment in the portfolio from existing resources.
The deal is subject to conditions, and Applegreen said it expects to complete the transaction in third-quarter 2019.
These operations will be managed by Applegreen’s existing management team based in the northeastern United States, to be supplemented with additional operational and finance personnel to ensure the successful integration of the assets into the Applegreen business, the company said.
Applegreen entered the U.S. market in 2014, expanded its small foothold in 2016 and in 2017 acquired The Brandi Group, which operated the 42-unit Pitt Stop convenience-store chain based in Columbia, S.C.
“Following significant acquisitions on the East Coast of the USA in the past two years, we are delighted to announce our first major acquisition in the Midwest,” Applegreen CEO Bob Etchingham said. “We consider this group of sites to be a good fit for our business given the convenience of its locations centered in the large metropolitan area of Minneapolis-St. Paul, and we are happy to expand on our existing relationship with CAP in the USA. We believe that this acquisition represents an opportunity to establish a significant presence in another market in the USA while leveraging our existing management and operational capabilities.”
Allentown, Pa.-based CrossAmerica is a wholesale distributor of motor fuels and owner and lessor of real estate used in the retail distribution of motor fuels. Its general partner CrossAmerica GP LLC is a wholly owned subsidiary of Laval, Quebec-based Alimentation Couche-Tard Inc. Formed in 2012 as Lehigh Gas Partners, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States; it distributes fuel to more than 1,200 locations and owns or leases approximately 900 sites with a geographic footprint covering 31 states.
“At the completion of this this transaction, we will have ‘dealerized’ all of our remaining company-operated sites and our sole focus will be on our wholesale operations partnering with strong operators to deliver our promise to the end consumer,” said Gerardo Valencia, CEO and president of CrossAmerica.
Established in 1992, Dublin-based Applegreen is a c-store food and beverage retailer and operator of gas stations, convenience stores and motorway service areas. It has 472 sites, including 193 in the Republic of Ireland, 158 in the United Kingdom and, with this deal, 121 in the United States.
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