Applegreen PLC Acquisition of a Majority Stake in Welcome Break (5637W)

TIDMAPGN

RNS Number : 5637W

Applegreen PLC

02 August 2018

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL ("RESTRICTED JURISDICTIONS"). THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

PLEASE SEE THE IMPORTANT NOTICE AT THE OF THIS ANNOUNCEMENT.

This announcement contains inside information within the meaning of the EU Market Abuse Regulation 596/2014.

Applegreen plc

("Applegreen" or the "Company" or, together with its subsidiaries, the "Group")

Transformational Acquisition of a Majority Stake in Leading UK Motorway Service Area Operator, Welcome Break Holdings Limited ("Welcome Break")

Applegreen, the number one Motorway Service Area operator in Ireland, to become a leading operator of Motorway Service Areas in the UK

Applegreen, a major petrol forecourt retailer with operations in the Republic of Ireland, the United Kingdom and the United States, is pleased to announce that it has entered into contracts to acquire a majority holding in Welcome Break (together with the Group, the "Enlarged Group") (the "Transaction"). The Transaction constitutes a reverse takeover of the Company under the ESM Rules for Companies ("ESM Rules") and the AIM Rules for Companies ("AIM Rules").

The Company has entered into an agreement with NIBC European Infrastructure Fund I C.V. (the "Seller") acting through its general partner NIBC Infrastructure Partners I B.V. to acquire its entire 55.02% holding in Welcome Break by the acquisition of shares in Appia Group Limited and unsecured subordinated Eurobond fixed rate notes issued by Appia Europe Limited (a wholly owned subsidiary of Appia Group Limited) (the "AGL Purchase") for a cash consideration of approximately EUR361.8 million (excludes leakage and interest between signing and closing) (the "AGL Consideration").

In addition to the AGL Purchase, the Company has entered into a separate conditional agreement with Welcome Break Investors II LP a limited partnership managed by Arjun Infrastructure Partners ("AIP"). AIP also manages the sole other current shareholder of Welcome Break with a current holding of approximately 45% (the "AIP Agreement"). The directors of the Company (the "Directors") believe that the agreement with AIP enhances the Transaction for Applegreen by giving it greater operational influence over Welcome Break.

Transaction Highlights

-- Transformational acquisition in the UK of a long established, well invested and cash generative business, Welcome Break

   --      Significantly broadens Applegreen's Motorway Service Area network 

-- Fulfils a strategic objective since IPO of achieving critical mass in the large and stable UK market while deepening the Group's exposure to non-fuel food and beverage revenue

   --     Fully underwritten debt and standby equity financing in place to fund the Transaction 

Introduction to the Transaction

The Company is acquiring a majority holding in Welcome Break. Welcome Break is comprised of a diversified, well invested and stable cash flow generating portfolio of 24 Motorway Service Areas ("MSA's"), two Trunk Road Service Areas ("TRSAs") and 29 hotels across 35 locations in the United Kingdom. Its sites are open 24 hours a day, 365 days a year and attract c.85m motorway customers per annum. Formed in 1959, Welcome Break has over 55 years' experience in the sector and 5,000 plus employees operating food and retail brands such as Starbucks, KFC, Burger King, Subway, Waitrose, Harry Ramsden's and WH Smith. Welcome Break also operates 22 Days Inn and seven Ramada hotels across the UK motorway network.

The Transaction will be financed by a new debt facility of EUR300 million and a proposed equity fundraising of a minimum of EUR100 million (the "Equity Fundraise"). The debt facility has been underwritten by NatWest Markets Plc and Lloyds Bank plc, whilst the Equity Fundraise has been fully underwritten to the value of EUR140 million on a standby basis by Goodbody and Shore Capital (the "Joint Bookrunners").

In connection with the Equity Fundraise, B&J Holdings Limited, which is an entity owned by Bob Etchingham and Joe Barrett (being the CEO and COO of the Applegreen respectively) and a c.52.49 per cent. shareholder in the Company, has given an irrevocable and unconditional commitment to the Company and the Joint Bookrunners to subscribe for EUR30m of the Equity Fundraise. It has been agreed that, if appropriate, this commitment can be scaled back at the sole discretion of the Joint Bookrunners. B&J Holdings Limited has also given an irrevocable and unconditional commitment to the Company to vote in favour of the AGL Purchase.

The Transaction constitutes a reverse takeover of the Company under the ESM and AIM Rules and requires shareholder approval and the publication of an AIM and ESM Admission Document (the "Admission Document") with details of the Enlarged Group. Trading in Applegreen's shares will be suspended on both the AIM Market of the London Stock Exchange ("AIM") and the ESM Market of Euronext Dublin ("ESM") with immediate effect until the Admission Document has been published. The Admission Document is expected to be published in September 2018.

Rationale for the Transaction

-- Transformational acquisition for Applegreen which will result in it becoming a leading MSA operator in the UK as well as Ireland. A significant step up in earnings and scale is anticipated from the diverse and well invested portfolio of the Enlarged Group.

-- Fulfils strategic objective since IPO of achieving critical mass in the UK market while deepening the Group's exposure to non-fuel food and beverage earnings.

-- Welcome Break has an established position as one of the three dominant owners and operators of MSA's in the UK and generated revenues of GBP723.4m and Adjusted EBITDA of GBP66.4m in the year to January 2018.

-- Welcome Break is an infrastructure business with very stable earnings. It is a well-regarded brand with a long and successful track record and has a high-quality portfolio of food and retail offerings. Welcome Break generates robust and consistent cashflows with high traffic volumes and strong margins particularly in its food business.

-- Provides Applegreen with access to MSAs operating from strategic locations with high barriers to entry for competitors; MSA sites are resilient to long term trends towards fuel efficiency and electric vehicles.

-- Introduces new brand partners including Starbucks, KFC, Waitrose, Pizza Express and Pret-A-Manger to the Group and the opportunity to leverage the Welcome Break brand.

-- Significant asset management opportunity for Applegreen to enhance performance of the Enlarged Group through operational efficiencies and synergies achieved through the combination of Welcome Break and Applegreen support functions.

Summary of the Transaction

The AGL Purchase

-- Applegreen has entered into a sale and purchase agreement with the Seller acting through its general partner NIBC Infrastructure Partners I B.V. to acquire its entire 55.02% holding in Welcome Break by the acquisition of shares in Appia Group Limited and the unsecured subordinated Eurobond fixed rate notes issued by Appia Europe Limited (a wholly owned subsidiary of Appia Group Limited) in each case, held by the Seller (the "AGL Purchase") for a cash consideration of approximately EUR361.8 million (excludes leakage and interest between signing and closing) (the "AGL Consideration").

The AIP Agreement

-- Applegreen has also entered into a separate conditional agreement with AIP which the Directors believe enhances the Transaction for Applegreen by giving it greater operational influence over Welcome Break.

-- Under the AIP Agreement, Applegreen will sell to AIP an 8.6% (to be adjusted for leakage and interest between signing and closing) stake in Welcome Break for c.EUR56.5m (the "AIP Sale"), which may be used by the Company to part finance the AGL Consideration. The AIP Agreement is conditional on, amongst other things, completion of the AGL Purchase. Under the terms of the AIP Agreement, Applegreen will be responsible for Welcome Break's strategy and operational matters and will share general governance rights with AIP including equal board representation. A dividend policy has also been agreed which provides for distribution of all excess cash in Welcome Break to its shareholders unless both shareholders otherwise agree.

-- In addition, the AIP Agreement provides that the Company will transfer its UK MSA and TRSA assets as well as its UK development pipeline assets to Welcome Break in exchange for the issuance of a further GBP120m of equity in Welcome Break to the Company (the "Applegreen UK Business Transfer"). Pursuant to the terms of the AIP Agreement, AIP will also invest a further GBP80m into Welcome Break with the intention (subject to the approval of the relevant Welcome Break lenders) to repay the junior debt within Welcome Break (the "AIP Additional Equity Investment"). Repayment of the junior debt within Welcome Break is expected to deliver significant interest savings to the consolidated entity. The AIP Agreement is subject to a number of conditions which will need to be satisfied prior to completion, further details of which are set out later in the announcement. The AGL Purchase is not conditional on the AIP Agreement.

-- Following the completion of the AIP Sale, the Applegreen UK Business Transfer and the AIP Additional Equity Investment, the Applegreen stake in Welcome Break will be approximately 50.01%.

The Transaction assuming the AGL Purchase and the AIP Agreement both complete

-- Assuming that the AGL Purchase and the AIP Agreement both complete, Applegreen will hold a 50.01% stake in Welcome Break with equal governance rights and significant management control. Applegreen expects to receive a management fee from Welcome Break as consideration for its management input.

Further detail on the Transaction is set out below in this announcement.

Commenting on the Transaction, Bob Etchingham, CEO of Applegreen said:

"Welcome Break is a fantastic business, it has led the way in providing the very best food and beverage facilities on the UK motorways. We were attracted to Welcome Break because of the strength of its franchise, the excellent management team and the committed staff at each of its 35 locations. We look forward to continuing to grow the Welcome Break business and to offering the c. 85 million customers who visit Welcome Break each year the very best experience on UK motorways."

Commenting on the Transaction, Darren Kyte, Managing Director of NIBC Infrastructure Partners and Chairman of Welcome Break Group said:

"This is a transformational transaction in the UK MSA sector, and I am sure that the combination of the Applegreen Service Area operations in the UK with those of Welcome Break, and combined management capabilities will help build further upon the consistent and strong earnings growth seen by both businesses over the past decade."

For further information, please contact:

Applegreen

Bob Etchingham, CEO [phone]

Niall Dolan, CFO

Goodbody (Financial Adviser, Joint Global Coordinator, Joint Bookrunner [phone]

and ESM Adviser)

Joe Gill

Siobhan Wall

Richard Tunney

Shore Capital (Nominated Adviser, Joint Global Coordinator and Joint Bookrunner) [phone]

Malachy McEntyre

Stephane Auton

Patrick Castle

Drury Porter Novelli (Irish Financial PR Adviser) [phone]

Paddy Hughes

Powerscourt (UK Financial PR Adviser) [phone]

Nick Dibden

Lisa Kavanagh

Background to the Transaction

The Company achieved a successful initial public offering ("IPO") and listing on AIM and ESM in June 2015 pursuant to which it raised EUR70 million (gross) for the Company. Since that time, the Company has continued to pursue its stated strategy to accelerate the expansion of its estate by number of sites and rebrand a number of existing sites. At 31 December 2014, the Company had a total of 152 sites, located in the Republic of Ireland (96 sites), the United Kingdom (54 sites) and United States (2 sites). At 31 December 2017, the Company had a total of 342 sites, with 177 sites in the Republic of Ireland, 97 sites in the United Kingdom and 68 in the United States. In order to help fund this continued growth the Company successfully raised EUR46.9 million (gross) through an equity placing of new shares in September 2017.

A key part of the Group's growth strategy (as was set out at the time of the IPO) continues to be to develop Service Area sites in the United Kingdom, including MSAs. The Company has had good success in executing this strategy in Northern Ireland with the opening of several MSAs. Given the high barriers to entry in relation to new MSAs in the UK (which are described further below), the Company has not yet opened any new MSAs in Great Britain but has commenced the formal planning process on four MSA sites and a number of smaller TRSA locations. The Directors believe that the Transaction is a unique opportunity to transform its business in the United Kingdom and significantly diversify its portfolio and revenue streams.

Details of the Transaction

The AGL Purchase

The Company and the Seller acting through its general partner NIBC Infrastructure Partners I B.V. have entered into a sale and purchase agreement on 2 August 2018 (the "Share Purchase Agreement"). Pursuant to the Share Purchase Agreement the Company has agreed to purchase a 55.02% holding in Welcome Break by the acquisition of shares in Appia Group Limited ("AGL") and the unsecured subordinated Eurobond fixed rate notes issued by Appia Europe Limited (a wholly owned subsidiary of AGL) in each case, held by the Seller. AGL is the holding company for the Welcome Break Group. Completion of the Share Purchase Agreement is subject to the consent of the Welcome Break senior lenders to the change of control of Welcome Break and to the approval of the Transaction by an ordinary resolution of the shareholders of the Company. If the shareholders of the Company do not approve the Transaction, the Company must pay the Seller a break fee of 1% of the consideration. B&J Holdings Limited, a company owned by Bob Etchingham and Joe Barrett and which holds c 52.49% of the shares in the Company, has irrevocably and unconditionally undertaken to vote in favour of the resolution of the shareholders of the Company to approve the Transaction.

The Transaction has been agreed on the basis of locked box accounts of Welcome Break as at 30 January 2018 (the "Locked Box Accounts"). Certain payments (such as dividends and return of capital) made by Welcome Break to the Seller after that date (unless they are expressly permitted in the Share Purchase Agreement) will result in a reduction in the consideration payable. The Seller has given the Company certain fundamental warranties about its ownership of the shares and Eurobonds to be sold to the Company and its capacity to enter into the Share Purchase Agreement (the "Fundamental Warranties"). The liability of the Seller in respect of the Fundamental Warranties and all other claims under the Agreement cannot exceed the consideration payable to the Seller. The Seller has also given warranties to the Company about the Locked Box Accounts and the ownership of the shares in Welcome Break (the "General Warranties"). The Seller's liability under the General Warranties are subject to a cap of 10% of the consideration payable to the seller. Claims under all warranties must be made within 18 months of Completion. The Company has procured warranty and indemnity insurance in respect of the Fundamental Warranties, the General Warranties and a limited number of additional business warranties given by non-executive directors of AGL appointed by the Seller in respect of which their personal liability has been capped at GBP1. The maximum recourse under the warranty and indemnity policy is GBP30m.

The AIP Agreement

Applegreen has also entered into a separate conditional agreement with AIP which the Directors believe enhances the Transaction for Applegreen by giving it greater operational influence over Welcome Break.

Under the AIP Agreement, Applegreen will sell to AIP an 8.6% (to be adjusted for leakage and interest between signing and closing) stake in Welcome Break for c.EUR56.5m (the "AIP Sale"), which may be used by the Company to part finance the AGL Consideration. The AIP Agreement is conditional on, amongst other things, completion of the AGL Purchase. The AGL Purchase is not conditional on the agreement with AIP. Under the terms of the AIP Agreement, Applegreen will be responsible for Welcome Break's strategy and operational matters and will share general governance rights with AIP including equal board representation. A dividend policy has also been agreed which provides for distribution of all excess cash in Welcome Break to its shareholders unless both shareholders otherwise agree.

In addition, the AIP Agreement provides that the Company will transfer its UK MSA and TRSA assets as well as its UK development pipeline assets to Welcome Break in exchange for the issuance of a further GBP120m of equity in Welcome Break to the Company. An adjustment mechanism has been agreed to ensure that the asset valuation is at an appropriate level having regard to the relative shareholdings and future outcomes of MSA planning applications. The Company and AIP have undertaken to use all reasonable endeavours to conclude the formal business transfer agreements or share purchase agreements required to effect the transfer. Completion of the AIP Additional Equity Investment is subject to completion of the Applegreen UK Business Transfer.

Pursuant to the terms of the AIP Agreement, AIP will also invest a further GBP80m into Welcome Break with the intention (subject to the approval of the relevant Welcome Break lenders) to repay the junior debt within Welcome Break. Repayment of the junior debt within Welcome Break is expected to deliver the consolidated entity with significant interest savings.

Following the completion of the AIP Sale, the Applegreen UK Business Transfer and the AIP Additional Equity Investment, the Applegreen stake in Welcome Break will be approximately 50.01%.

The Transaction assuming the AGL Purchase and the AIP Agreement both complete

Assuming that the AGL Purchase and the AIP Agreement both complete, Applegreen will hold a 50.01% stake in Welcome Break with equal governance rights and significant management control. Applegreen expects to receive a management fee from Welcome Break as consideration for its management input.

Overview of Welcome Break - a leading MSA Operator in the UK

Welcome Break operates a diversified portfolio from 35 locations, mainly MSAs and other service areas across the UK strategic road network, including premium locations on the M1, M4, M11 and M40 motorways.

Established in 1959, Welcome Break is one of the three largest MSA operators in the UK, attracting 85 million motorway customers per year. It employs over 5,000 staff to operate a range of food and retail brands such as Waitrose, Starbucks, Pizza Express, Harry Ramsden's, Krispy Kreme, WH Smith, KFC and Burger King, as well as 22 Days Inn and seven Ramada hotels.

Welcome Break has five primary categories of service offering across its estate: catering, amenity retail & convenience food, forecourt/lodging, fuel and amusements, in order to serve a broad range of customers. This diversified offering allowed Welcome Break to grow non-fuel revenues and gross profits at compound annual growth rates ("CAGRs") of 3.5 per cent. and 5.3 per cent. respectively between 31 January 2016 and 31 January 2018. Approximately 50 per cent. of Welcome Break's non fuel revenues come from catering sales, which grew at a CAGR of 5.8 per cent in the same period.

Its recent growth strategy has been to drive growth in turn-in rates by:

-- rolling-out successful franchise catering offerings across its estate (including branded Drive-Thrus);

   --      pioneering the installation of electric vehicle superchargers; 
   --      converting forecourts to the branded Welcome Break offering; and 
   --      identifying selective acquisitions of hotels to rebrand as Ramada. 

Welcome Break is headquartered in Newport Pagnell, United Kingdom. In the year to 28 January 2018, Welcome Break generated revenues of GBP723.4 million, adjusted EBITDA of GBP66.4 million. As at 28 January 2018, net debt stood at GBP391.6 million (excluding shareholder related loans) and gross assets were GBP465.5m.

Welcome Break's MSA estate is predominantly held under long-term leaseholds, with options to extend the majority of the leases at prevailing commercial rates, as well as two freehold MSA sites. Lease expiry dates fall between 2027 and 2112, and Welcome Break's estate strategy has been to secure favourable future rights to renew leases and secure long-term rent certainty.

Rationale for the Transaction

The Applegreen Board believes that the Transaction will be transformational for the Group and that there is a very compelling strategic rationale for the Transaction as set out below:

Significantly increases the operating scale of Applegreen in the UK

The Transaction would transform Applegreen's business in the UK providing scale to the existing UK business along with synergies across the UK.

Provides a step change in the expansion of the Group

The Transaction will provide significantly greater exposure to the MSA assets which the Directors believe are more stable and cashflow generative than Petrol Filing Stations ("PFS"). The Directors anticipate the Group will benefit from a significant increase in earnings from having a larger, more diverse and well invested portfolio as a result of the Transaction.

Welcome Break has a strong and well-known brand in the UK

The Directors believe that Welcome Break has a strong and well-known brand in the UK and has a strong track record over many years including during the recent financial crisis.

Access to strategic sites with high barriers to entry for competitors

MSAs are regulated sites and the only commercial presence allowed on UK motorways, providing a variety of goods, amenities and services including fuel, catering, retail offerings and accommodation, subject to certain minimum requirements. Given local planning authority restrictions and the capital investment required to develop an MSA, there are high barriers to any significant expansion of the number of MSAs in the UK network. This is exemplified by the fact that during the last ten years, no new motorways and only four new MSAs have been developed.

Welcome Break has strong cash flow generation

Welcome Break generates strong consistent cash flows with high traffic volumes and strong margins, particularly in the food business.

Operational opportunities

The Directors believe that there is significant potential to enhance the performance of the Enlarged Group through operational efficiencies and synergies achieved through Applegreen's operational expertise and the combination of Applegreen and Welcome Break's support functions.

Diversified revenue streams

Welcome Break has diversified revenue streams. It offers five primary categories of products and services across its estate: catering, convenience food, amenity retail (including forecourt retailing (non-fuel) and lodging) and amusements/other commercial activities (e.g. ATM, parking fees) and fuel sales. In addition, it serves a diverse range of customers including leisure travelers, commercial drivers, business customers and commuters.

Long term resilience nature of the Welcome Break business

The Directors believe that MSA sites are resilient to the longer term trends towards fuel efficiency and electric vehicles given that a significant proportion of stoppages are for reasons other than fuel. Welcome Break has pioneered the installation of electric vehicle superchargers by Tesla and Ecotricity.

Broadening portfolio of partners

The Transaction will provide the Group with access to new partners which currently work with Welcome Break, including Starbucks, KFC, Waitrose, Pizza Express and WH Smith.

Financial effects of the Transaction

It is expected that Welcome Break will be consolidated within Applegreen's financial results. The Transaction is expected to generate adjusted earnings per share accretion in the first full financial year following completion. Assuming the minimum Equity Fundraise of EUR100m completes and the new bank facilities are drawn, Applegreen's pro forma consolidated Net Debt (excluding shareholder related loans) / Adjusted EBITDA for the year ended 31 December 2018 is currently expected to be approximately 4.5x, with strong combined cash flow generation expected to drive a material deleveraging profile thereafter. The Company is targeting a leverage level below 3.0x within two years. The debt held within Welcome Break will all be non-recourse to Applegreen.

Applegreen intends to continue its current dividend policy for the combined business.

Financing of the Transaction

The Company will fund the consideration for the Transaction by drawing down a new senior facilities agreement for EUR300 million to fund the Transaction and the Equity Fundraising, further details of which are set out below.

New debt facility

The Company has entered into a senior facilities agreement with NatWest Markets Plc / Ulster Bank and Lloyds Bank plc as mandated lead arrangers and underwriters (the "Facilities Agreement"). Pursuant to the terms of the Facilities Agreement, the lenders are to provide loan facilities to the Company totalling EUR300 million including a EUR150 million revolving credit facility and separately a EUR150 million term loan facility. The Facilities Agreement also includes an accordion option which allows the Company to request an increase in the facilities.

Standby underwritten Equity Fundraise

The Company proposes to launch an Equity Fundraise to raise a minimum of EUR100m around the same time that the Company publishes an Admission Document in connection with the Transaction. The Equity Fundraise has the benefit of standby underwriting from Goodbody and Shore Capital for an amount up to EUR140m. The Company, Goodbody and Shore Capital expect that the minimum Equity Fundraise amount will be less than the maximum standby underwritten amount, on the basis that the Company will receive c.EUR56.5m on completion of the AIP Sale, which amount may be used to part fund the consideration for the Transaction.

The final terms of the Equity Fundraise, including the issue price, the number of new ordinary shares and the form of the Equity Fundraise are subject to agreement between the Company and the Joint Bookrunners at the time of launching the Equity Fundraise.

In connection with the Equity Fundraise, B&J Holdings Limited, which is an entity owned by Bob Etchingham and Joe Barrett (being the CEO and COO of the Company respectively) and a c.52.49 per cent. shareholder in the Company, has given an irrevocable and unconditional commitment to the Company and the Joint Bookrunners to subscribe for EUR30m of the Equity Fundraise. It has been agreed that, if appropriate, this commitment can be scaled back at the sole discretion of the Joint Bookrunners.

The principal conditions to the above underwriting arrangements include the publication of an Admission Document in connection with the Transaction, shareholder approval for the Transaction and (if required) the Equity Fundraise, entry into an underwriting agreement and related matters and no material adverse change occurring in the business environment and operations of Applegreen or Welcome Break.

Indicative Timetable

   --      Announcement of Transaction - 2 August 2018 
   --      Publication of Admission Document - September 2018 

-- Launch of the Equity Fundraise - Around the same time as publication of the Admission Document

   --      Completion of the Transaction and Equity Fundraise - Late September 2018 

The above dates are indicative only and subject to change.

About the Company

Established in 1992, Applegreen is a major petrol forecourt retailer with operations in the Republic of Ireland, the United Kingdom and the USA. The Company is pursuing a growth strategy focused on acquiring and developing new sites in each of the three markets in which it operates. As at 31 December 2017, the business operated 342 forecourt sites and employed c 4,900 people.

The Company offers a distinctive convenience retail offering in the forecourt space with three key elements:

   --      A "low fuel prices, always" price promise to drive footfall to the stores; 
   --      A "Better Value Always" tailored retail offer; and 

-- A strong food and beverage focus aiming to offer premium products and service to the customer.

Applegreen has a number of strategic partnerships with international brands including Burger King, Subway, Costa Coffee, Greggs, Lavazza, Chopstix, Freshii and 7-Eleven. The business also has its own food offer through the Bakewell café brand.

Applegreen is the number one Motorway Service Area operator in the Republic of Ireland.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement. This Announcement has been issued by the Company and is the sole responsibility of the Company.

IMPORTANT NOTICE

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL ("RESTRICTED JURISDICTIONS").

THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.

References in this announcement and these terms and conditions to Goodbody refer to Goodbody Stockbrokers UC.

References in these terms and conditions to Shore Capital refer to Shore Capital Stockbrokers Limited and/or Shore Capital and Corporate Limited as the context admits.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Shore Capital or Goodbody Stockbrokers or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The distribution of this Announcement may be restricted by law in certain jurisdictions and persons into whose possession this Announcement, or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Statements in this Announcement with respect to each of Applegreen's and Welcome Break's business, strategies, projected financial figures, transaction synergies, earnings guidance, financial guidance, future dividends and beliefs and with respect to the Transaction, as well as other statements that are not historical facts are forward-looking statements involving risks and uncertainties which could cause the actual results to differ materially from such statements. Statements containing the words "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project" and similar expressions (or their negative) identify certain of these forward-looking statements. The forward-looking statements in this Announcement are based on numerous assumptions regarding the transaction and each of Applegreen's and Welcome Break's present and future business strategies and the environment in which each of Applegreen and Welcome Break will operate in the future. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond each of Applegreen's and Welcome Break's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as each of Applegreen's and Welcome Break's ability to obtain financing, changes in the political, social and regulatory framework in which each of Applegreen and Welcome Break operates or in economic, technological or consumer trends or conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. No person is under any obligation to update or keep current the information contained in this Announcement or to provide the recipient of it with access to any additional information that may arise in connection with it.

This Announcement includes certain combined or pro forma financial information for Welcome Break and Applegreen. Such combined or pro forma financial information is preliminary in nature, only represents current estimates of the potential impact of the Transaction on Applegreen, remains subject to change and is provided solely for illustrative purposes. No reliance should be placed on the combined or pro forma financial information contained in this Announcement.

No statement in this Announcement is intended to be a profit forecast, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited are, authorised and regulated in the United Kingdom by the FCA. Shore Capital and Corporate Limited acts as nominated adviser to the Company for the purposes of the AIM Rules. Shore Capital is acting exclusively for the Company and for no one else in connection with the Transaction and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Shore Capital or for providing advice in relation to the Transaction, or any other matters referred to in this Announcement.

Goodbody Stockbrokers UC, which is regulated in Ireland by the Central Bank of Ireland, acts as the ESM adviser to the Company for the purposes of the ESM Rules. Goodbody Stockbrokers UC is acting exclusively for the Company and for no one else in connection with the Transaction and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Goodbody Stockbrokers UC or for providing advice in relation to the Transaction, or any other matters referred to in this Announcement.

Save for the responsibilities and liabilities, if any, of Shore Capital under FSMA or the regulatory regime established thereunder or in respect of fraudulent misrepresentation, no representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by or on behalf of the Shore Capital, Goodbody Stockbrokers UC or by their respective affiliates, agents, directors, officers and employees as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

ACQSSLSDEFASEEA

(END) Dow Jones Newswires

August 02, 2018 02:02 ET (06:02 GMT)