EZ Energy buys 13 US gas stations for $12.7m

The company previously bought 40 gas stations and convenience stores for $37 million in March and April.

EZ Energy Ltd. (TASE:EZ) is expanding its business in the US. The company has signed a contract to buy 13 gas stations and convenience stores in the US for $12.7 million plus an as yet undecided amount for inventory. The company promised to operate the convenience stores and gas stations for 20 years under the seller’s brand and franchise, and to rebrand 12 of the stores at a cost of $2.5-3.7 million. The company will pay a one-time franchise fee of $30,000 per store ($360,000 altogether), plus 8% of the stores’ turnover. The name of the seller was not disclosed.

EZ Energy said that the convenience stores posted $12.9 million revenue and the gas stations sold 31.6 million gallons in 2006, less than their sales in 2005.

EZ Energy said it would finance the acquisition with bank financing and sale-leaseback under which it will sell the properties and lease them back in a long-term contract. The balance of the deal will be financed from the company’s own resources. Including proceeds from its IPO.

EZ Energy bought 26 gas stations for $22 million in March and 14 gas stations for $15 million in April.

EZ Energy vice chairman Oren Zahavi said, “The recent deals, as well as other deals we’re reviewing, are in line with EZ Energy’s growth strategy.”

Published by Globes [online], Israel business news - www.globes.co.il - on May 9, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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