Ampol Completes $1.16 Billion EG Australia Acquisition, Adds 480 Sites
Synopsis
Key Highlights Ampol has now finalised its $1.16 billion purchase of EG Australia. The deal increases Ampol’s retail network to a total of 480 sites across Australia. All of this is expected to come…
Key Highlights
- Ampol has now finalised its $1.16 billion purchase of EG Australia.
- The deal increases Ampol’s retail network to a total of 480 sites across Australia.
- All of this is expected to come under the Foodary and U-GO brands as it is rolled out across the enlarged network.
- Ampol expects $65 million-$80 million in annual synergies.
- The acquisition should also be accretive to earnings and free cash flow after integration.
Ampol has finalised the acquisition of EG Australia for total gross cash consideration of $1.16 billion to strengthen its fuel and convenience retail footprint across Australia.
It adds to a network of 480 retail sites as Ampol strengthens its footprint, primarily along Australia’s east coast. According to the company, a larger network is essential to meet the deployment of its Foodary convenience stores and U-GO self-service petrol brand.
Integration anticipated to yield annual synergies
Ampol and EG Australia entered into fuel supply and branding arrangements at a wholesale level long before the acquisition.
Ampol estimates the deal will result in between $65 million and $80 million of annual synergies. Part of the integration plan is to transition 125 sites into the unstaffed U-GO format, which the company also expects will fuel further pumps for volumes and earnings growth through its larger retail footprint.
Acquisition to Support Earnings Growth
Ampol expects the acquisition to be high single-digit earnings per share accretive and double-digit free cash flow per share accretive post-integration. The combined network will also enable an expansion of the company’s convenience offer Foodary, speed up the U-GO rollout and expand the Woolworths Everyday Rewards program.
Source: Capital Brief
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