Viva Energy, a supplier of petrol and diesel, has announced the acquisition of OTR Group, the owner of On the Run convenience stores, for $1.15 billion. The deal, which is subject to approval from competition regulators, will give Viva control of the 205 On the Run retailers that generate over $3 billion in revenue annually and employ approximately 6500 people.
The network consists of 184 integrated fuel and convenience stores, 31 standalone retail stores, as well as Smokemart and Giftbox tobacco and cigarette stores, and the Mogas wholesale fuel and lubricants businesses in regional South Australia.
Viva’s CEO, Scott Wyatt, has described the acquisition as “transformational” for the company, stating that On the Run will become its flagship convenience brand, replacing Coles Express. Wyatt anticipates that the addition of On the Run’s superior convenience offerings, including quick serve restaurants, will increase the attractiveness of Viva’s retail offerings and reduce the company’s dependency on traditional fuels.
The acquisition is a significant move for Viva, as it comes at a time when traditional fuel suppliers are experiencing a decline in their core business due to the shift towards electric vehicles. Although Viva is planning a clean fuels hub at its Geelong refinery site in Victoria, its plans for an LNG import terminal have faced regulatory and policy delays.
The acquisition is expected to add between 6% and 26% to Viva’s earnings per share and will be funded by $1 billion of debt and working capital already held within Viva, as well as a $150 million equity issuance to the sellers.
For the latest retailer news and information, check out the ServoPro website or to speak to us on how we can help your business contact us.