18 hours ago
Applegreen to invest $750m in Massachusetts motorway service stations under 35-year deal
Applegreen
, the Irish fuel forecourt retail group, has been awarded a 35-year contract to operate 18 motorway service areas in Massachusetts.
Under the deal it will invest more than $750 million (€654 million) in the network.
The group, backed by US private equity giant
Blackstone
, will spend the money replacing buildings at nine plazas and carrying out major renovations of the others, US news media reported. This would make it the biggest spending project Applegreen has entered into in the US.
The company will have the contract to operate the restaurants, cafes and shops at the plazas and to sell fuel and operate electric-vehicle (EV) charging sites at each location.
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It will pay up to $994 million in rent to the State of Massachusetts during the 35-year deal, reports said.
Of the 18 service stations, 11 are on the longest motorway in the state, known as the Massachusetts Turnpike, which spans 222km and was opened in 1957.
Applegreen beat two other final-round bidders for the contract. Fuel supplier Global Partners had been seen as the favourite to be selected by the Massachusetts Department of Transport (MassDOT).
'We're thrilled to have the opportunity to work with the Commonwealth of Massachusetts and MassDOT to improve the travel experiences of drivers across Massachusetts for years to come,' a spokesman for Applegreen said.
Applegreen entered US market in 2014 when it bought two sites in Long Island.
In 2020, the group was part of a consortium that signed a 33-year lease to refurbish and operate 27 motorway plazas on New York Thruway, a system of toll roads within the State of New York. It does not have the fuel sale element of that deal.
Applegreen runs more than 100 US motorway service areas, where it operates restaurant and cafe brands such as Burger King, Shake Shack, Chick-fil-A, Popeyes, Starbucks, Dunkin', Panera Bread and Panda Express.
The company was founded by Robert Etchingham in 1992 with one station in Ballyfermot, west Dublin. It now has almost 200 locations in the Irish market. The company typically invests more than €30 million a year in the Irish market on store openings, upgrades and improvement.
Applegreen was taken private from the stock market in March 2021 by Blackstone in a €718 million deal that saw Mr Etchingham and long-standing executive Joe Barrett retain a combined 42.5 per cent stake in the group.
The company's then independent directors decided unanimously to recommend the takeover bid for the group, arguing it faced borrowing constraints as a listed company as it faced large investments in electric car-charging facilities and US highway service areas.
Applegreen agreed this year to sell its UK filling station business to UK rival EG On The Move for an undisclosed sum. That business had 98 sites. The company said it would use the proceeds from the transaction to invest in its business in Ireland, the UK and US.
The deal did not affect Applegreen's Welcome Break motorway service business in the UK, which also has a network of 31 hotels.
