EZ Energy to acquire 26 gas stations in US
Deal expected to yield USD 87 million per year. Holding company also negotiating additional purchase of 65 gas stations, convenience stores
EZ Energy LTD, an Israeli holding company controlled by Eli Zahavi, continues to expand in the US.
A subsidiary of the company has signed an MOU to acquire 26 gas stations and convenience stores for USD 26 million and an extra figure to cover the current inventory in the stores.
Annual revenue from the properties reaches USD 87 million and is generated, among others, from selling close to 100 million liters of fuel products. As part of the deal, the subsidiary will also lease office space in the building where the seller is headquartered. The agreement is expected to be finalized by March 12, 2007.
At the same time,EZ Energy is conducting negotiations to purchase an additional 65 gas stations and convenience stores with accumulative annual sales of approximately USD 230 million.
Purchase price – USD 100 million
Oren Zahavi, the company's director, was responsible for the negotiations for the deal.
"If this deal comes to fruition, within a few months EZ Energy will hold a portfolio of 106 gas stations and convenience stores, yielding USD 370 million. We intend to finance the deal with financial investors enabling EZ to expand its service station and convenience store portfolio with relatively low investments," he said.
In order to finance the deal, EZ Energy plans to gain capital from the Tel Aviv Stock Exchange. The company reported last week that the directorate has authorized contacts with underwriters to lead a private issue of bonds and options. The scope of the issue has still not been finalized.
EZ Energy (formerly Adiron Investments) whose control was transferred to Zahavi last year, is working today to locate and purchase clusters of service stations in the US. The company's strategy is to locate clusters that ensure high yields, and at the same time try to introduce financial partners. This way, the company plans to purchase a large number of gas stations using relatively small equity to complete the acquisition.
