12 months after announcing the plan to turbocharge mobility and convenience Viva Energy Australia has today finalised the acquisition of the OTR Group.  With the OTR acquisition completed and the recent Coles Express acquisition, Viva Energy now boasts a network in excess of 1,000 retail fuel sites.

When the acquisition of the OTR Group was first announced ACAPMA CEO Mark McKenzie highlighted the significance of the move.

“The Viva Energy/OTR deal is nationally significant and one that sends a clear message to those working within the industry – and those watching from the outside”, said ACAPMA CEO Mark McKenzie.

“For those within the industry, the clear message from this deal (and the recent strategic actions of other national P&C businesses) is that there is a significant opportunity to future-proof our industry by fully committing to the expansion of local convenience and hospitality offerings, in the face of a projected decline in the demand for conventional fuels over the next two decades”, said Mark.

“For those watching from the outside -including the investment community and politicians and the broader the community – the unmistakable message is that our industry is not going to skulk off into the distance as battery electric vehicles and hydrogen vehicles take hold in the national vehicle fleet”, said Mark.

“Rather, our industry will continue to utilise our extensive national asset base and growing retail capability to create a dynamic Mobility & Convenience offering that will deliver positive business returns for many years to come”, concluded Mark.

Having gone through an exhaustive ACCC approval process that saw the divestiture of some sites in the South Australian market the finalisation of the acquisition today represents the end of a long planning process and the beginning of an exciting integration and optimisation period.

“Today’s announcement marks a critical step forward in the Convenience and Mobility business’s ambition to grow earnings beyond $500 million over the next five years,” said Viva Energy CEO and Managing Director Scott Wyatt. “Having completed the OTR Group and Coles Express acquisitions, we will extend our world-class convenience retail offering across the largest company-operated network in Australia, with a pathway to more than 1,000 stores.”

“Having completed the OTR Group and Coles Express acquisitions, we will extend our world-class
convenience retail offering across the largest company-operated network in Australia, with a pathway to
more than 1,000 stores.”

The strategic rationale for the acquisition has been explained by Viva Energy in terms of the OTR group acquisition providing high-quality, non-fuel earnings and growth potential in what is a sophisticated offering that can be leveraged across the broader Viva Energy Convenience and Mobility business.

Viva Energy Australia paid a headline consideration of $1,215 million to Peregrine Corporation.

The OTR Group comprises:

  • A network of 226 stores comprising 195 fuel and convenience stores and 31 stand-alone stores, of which 42 are located outside South Australia. The business has leasehold rights to a growth pipeline of 85 sites across the country, which will be developed into new OTR stores over the next few years;
  • Within the network there are 94 QSRs including Subway, Wokinabox, Guzman Y Gomez,
    KrispyKreme, Hungry Jacks and Oporto, of which 75 are fully integrated under the same roof as the convenience offering, often sharing the same counter;
  • The Smokemart and Giftbox (SMGB) network, which provides tobacco wholesale arrangements to
    OTR and other retail third-party networks. It has 278 company-owned and controlled leasehold
    stores across Australia, together with an online retail portal, and;
  • The OTR fuel wholesale and lubricants businesses (Mogas Regional and Reliable Petroleum), which service commercial customers in regional South Australia and the Northern Territory.

More Information
Viva Energy Australia – OTR Acquisition Announcement

Elisha Radwanowski BCom(HRM&IR)
ACAPMA

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