Applegreen takes majority stake in Welcome Break

2nd Aug 2018 14:06

(Sharecast News) - Petrol forecourt retailer Applegreen has entered into contracts to acquire a majority holding in Welcome Break, it announced on Thursday, which would constitute a reverse takeover under the ESM and AIM rules.The AIM-traded firm said it entered into an agreement with NIBC European Infrastructure Fund I, acting through its general partner NIBC Infrastructure Partners I, to acquire its entire 55.02% holding in Welcome Break by the acquisition of shares in Appia Group and unsecured subordinated eurobond fixed rate notes issued by Appia Europe - a wholly owned subsidiary of Appia Group - for a cash consideration of approximately €361.8m.In addition to the AGL Purchase, Applegreen said it also entered into a separate conditional agreement with Welcome Break Investors II - a limited partnership managed by Arjun Infrastructure Partners.AIP also manages the sole other current shareholder of Welcome Break, with a current holding of approximately 45%.The Applegreen board said it believed that the agreement with AIP enhanced the transaction for Applegreen, by giving it greater operational influence over Welcome Break.It said it would "significantly broaden" its motorway service area network, and would fulfil a strategic objective since its initial public offering of achieving "critical mass" in the large UK market, while deepening its exposure to non-fuel food and beverage revenue.Applegreen said it had fully underwritten debt and standby equity financing in place to fund the transaction."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 officer 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."We look forward to continuing to grow the Welcome Break business and to offering the 85 million customers who visit Welcome Break each year the very best experience on UK motorways."Darren Kyte, managing director of NIBC Infrastructure Partners and chairman of Welcome Break Group, added that it was a "transformational transaction" in the UK motorway services area sector."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 upon the consistent and strong earnings growth seen by both businesses over the past decade," Kyte said.