Viva Energy to acquire SA family owned petrol station business
South Australia’s Shahin family-owned petrol station chain OTR is set to be acquired by an ASX-listed corporation for $1.2 billion.
South Australia’s wealthiest family – the Shahins – have sold their petrol and convenience empire OTR to ASX-listed Viva Energy for $1.15bn.
Now headed by Yasser, Charlie and Sam Shahin, the OTR Group, formerly branded as On The Run, was founded by the family patriarch Fred Shahin who bought a service station in Woodville Park in 1984,
Since then the business has grown to encompass more than 170 stores across Australia, including the OTR petrol and convenience brand, the Smokemart and Giftbox retail stores as well as a wholesale fuels business.
The Shahin family also invested $100m building The Bend motorsport park at Tailem Bend, which has a new 10-year sponsorship deal under the sale agreement.
The Shahin family’s ownership of the Peregrine Property, Construction & Development (PCI) and Motorsport (The Bend) divisions will remain unchanged, and the OTR Group will remain headquartered in Adelaide, OTR said in a statement.
Yasser Shahin will also stay with the business to guide its integration into Viva Energy, which also owns the Coles Express and Shell and Liberty network of service stations nationally.
“The announcement today marks an incredibly exciting time for our company,’’ Mr Shahin said.
“Expanding OTR’s iconic South Australian brand Australia wide delivers on several core objectives that have underpinned our business since its inception; to see OTR expand nationally.”
Following the integration of OTR, Liberty will operate almost 1000 convenience stores across Australia.
OTR is one of South Australia’s leading employers, with about 6500 staff, who will be retained as part of the deal.
The transaction involves a combination of cash and shares that will see the Shahin family become a major shareholder of Viva Energy Australia.
Viva said the deal supports its vision to be Australia’s leading convenience retailer, with OTR’s convenience expertise a key reason to buy it.
OTR generates more than 70 per cent of earnings from non-fuel retail, which would “otherwise have taken years to develop” for Viva, it told investors.
The deal will diversify its earnings exposure, lifting the share of earnings from non-fuel sources from about 30 per cent post the Coles Express acquisition to an expected 50 per cent of the convenience and mobility business.
Viva predicts earnings per share accretion of 6 per cent to 26 per cent with further potential from the OTR’s development pipeline of 90 sites and upgrading the Coles Express network to the OTR offer.
The purchase is self-funded and includes a $150m equity issuance to sellers, subject to 12-24 month escrow.
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