$1.15 billion payday for Aussie servo chain On The Run

A servo chain that had humble beginnings as a single store in Adelaide run by refugees has just landed a lucrative $1.15 billion deal.

A servo chain that had humble beginnings as a single store in Adelaide run by refugees has just landed a lucrative $1.15 billion deal.

On Wednesday, South Australian service station and convenience store chain On The Run, also referred to as OTR Group, was acquired by another Australian company for $1.15 billion.

In an announcement to the ASX, Viva Energy Australia revealed it had purchased the company to expand its base across the country.

On The Run made more than $3 billion in revenue in the last year.

The company’s 205 stores, predominantly in South Australia, as well as 65000 workers, will be merged into Viva Energy. There are a further 90 leasing rights to sites outside of South Australia that have been secured.

On the Run’s founder, Yasser Shahin, is being kept on to help merge the two businesses.

This petrol company has been bought for nine figures.

On The Run is a South Australian brand.

The acquisition is now “binding”, but still subject to regulatory approvals.

It is expected to be completed by the last half of this year.

Viva Energy has now gained a massive foothold in Australia’s convenience store market, saying it was fulfilling its role of being the “Australia’s leading convenience retailer”.

The power giant has been busy in recent months snapping up business opportunities.

In September last year, Viva Energy bought Coles Express, gaining more than 700 stores.

With its latest acquisition of On The Run, Viva Energy is now on track to control more than 1000 convenience stores and petrol stations.

Viva Energy now holds the largest market share of Australian petrol and convenience stores.

On the Run branched out into convenience and tobacco products to stay profitable due to petrol’s slim margins.

Speaking to The Australian Financial Review after the announcement of the merger, On The Run’s founder Mr Shahin said the entire business was born from one seemingly small decision his father made in the 1970s.

His parents arrived in Adelaide in 1974 after fleeing Lebanon. His father, Fred Shahin, saw a job being advertised in the local paper, The Adelaide Advertiser.

A local BP petrol station in the suburb of Woodville Park wanted a buyer, and they would even throw in a house next door to sweeten the deal.

The offer of a place to live caught Fred’s eye and he ended up taking over the petrol station.

One of Fred’s younger sons, Yasser, would go on to create the multi-billion dollar business.

He said after growing up around the petrol retail industry, he became frustrated at the small profits and the slim margins the business model endured, causing him to start selling convenience goods rather than just fuel.

Mr Shahin says the family framed and hung up the advertisement as it’s where everything started from.

Originally published as $1.15 billion payday for Aussie servo chain On The Run