Australian energy company Viva Energy have recently announced their acquisition of the OTR Group from Peregrine Corp. The acquisition is said to cost a whopping A$1.15 billion (US$713 million). The OTR Group consists of 205 On The Run convenience stores, selling integrated fuel and convenience retail items, as well as 92 fast-food outlets, a tobacco and cigarette wholesaler and a fuel & lubricant business located in South Australia.
The acquisition is expected to increase Viva’s earnings from non-fuel sources to up to 50%, a significant increase from the 30% it currently obtains. With a focus on integrating convenience stores and fuel, the acquisition is seen to benefit both the Viva Energy and OTR brand. The deal will be self-funded by A$1 billion of debt and working capital, and A$150 million of equity issued to the sellers.
The announcement was made by David Winning, who is a Sydney correspondent for the Wall Street Journal. He is known for his regular articles on the topics of energy, resources, commodities and business news. He has reported on several prominent acquisitions such as this one, spanning Australia, Southeast Asia and Europe.
As a leader in Australian fuel connected convenience store sector, Viva Energy has taken a big leap with this deal that is seen to bring both the companies financially rewarding returns. The OTR Group has a prestigious brand, both in the petrol and convenience industry that is expected to be integrated with the expertise of Viva Energy. This is certain to change the energy industry in Australia for the positive.