Applegreen acquires a 40% stake in US forecourt operation
Forecourt retailer Applegreen will continue to focus potential acquisition opportunities in the US after agreeing to pay $37.6m (£30.9m) for a 40% stake in a Connecticut-based highway services operator, according to chief executive Bob Etchingham.
The chain has six sites in Northern Ireland, including three motorway services areas and three smaller forecourts.
In its latest US deal Applegreen has joined forces with two infrastructural funds to buy CT Service Plazas, which has 23 plazas on key routes in Connecticut.
It has also entered a 'call option' agreement with one of the other buyers, TD Greystone, that is exercisable after five years and which will enable Applegreen to boost its stake to 60%.
Applegreen said it hopes to secure approval from the Connecticut Department of Transportation for the initial acquisition in the third quarter of this year.
Mr Etchingham said that the deal gives Applegreen access to retail partners that it does not already have relationships with in the US, such as McDonald's and Dunkin' Donuts.
However, Applegreen has already been courting Dunkin' Donuts to open an outlet at a new services outlet the forecourt retailer is constructing in the north east. It already has strong retail relationships with brands such as Burger King, Subway and 7-Eleven.
The fuel offering at the 23 plazas being acquired is operated by Mobil. Mr Etchingham added that using the Applegreen brand in its US outlets is not a key priority.
"Mobil is the market-leading fuel brand in that area, so we wouldn't see that changing in the short-term, he said.
"When we take on stores, they very often come with a fuel contract, which means you can't change the fuel brand for maybe a number of years. The majority of our sites in the US would not be branded Applegreen on the forecourt.
"I wouldn't say it's one of our primary objectives. Our development there is still in the relatively early stages. The Applegreen brand is virtually unknown."
In June Applegreen acquired leaseholds on 46 forecourts across Michigan, Minnesota and Wisconsin.