Bus Industry News, Company News

Viva Energy acquires OTR Group to transform retail business

The announced acquisition marks a milestone moment for Viva Energy as it realises its goals for national expansion

Viva Energy has announced that it has acquired On The Run (OTR) Group for $1.15 billion from Peregrine Corporation in a major boost to its retail business.

The transaction is complete, subject to customary regulatory approvals from the ACCC, but when cleared it will allow Viva to establish more than 1,000 stores and be a leading convenience retailer in Australia.

Viva Energy says the acquisition accelerates its earnings growth and allows it to increase its integration of Coles Express acquisitions through OTR product offerings and associated brands.

OTR Group is a leading independent convenience retailer in Australia that generates more than $3 billion of revenue annually and employing roughly 6,500 people, including a convenience retail network of 205 company owned stores.

Viva Energy Group has entered into a binding agreement to acquire the OTR Group for a total consideration of $1.15 billion from Peregrine Corporation. The OTR network and wholesale fuel businesses will be acquired by way of share sale, while the SMGB business will be via asset sale.

The consideration will be funded through $1 billion of debt and working capital and an equity component of $150 million to be issued to the sellers. The debt component will be funded through existing debt facilities plus bridging finance, with long-term debt facilities put in place over time.

Approximately 6,500 OTR team members and support centre staff will join the Viva Energy Group on their current terms and conditions. Viva Energy will retain the OTR head office in Adelaide which, along with the existing Melbourne-based team, will service the Group’s Convenience and Mobility business over time.

OTR Founder Yasser Shahin will be retained by Viva Energy to support the existing OTR Group and transition the business to Jevan Bouzo, Viva Energy’s CEO of Convenience & Mobility. Their combined priorities will be to integrate the businesses, build the operating structure, further develop the OTR network, test formats for deployment into the Coles Express network and realise synergies.


RELATED ARTICLE: ABC announces winner of Best Bus competition


Completion of the transaction is expected to occur in the second half of 2023, subject to customary FIRB and ACCC approval. In the event that completion does not proceed, the parties have agreed to certain fall-back provisions for ongoing supply and the transfer of the commercial bulk fuels business (also subject to regulatory conditions) on commercial arms’ length terms.

“The introduction of OTR’s superior convenience offering, including quick serve restaurants, will help revolutionise the diversity and attraction of our retail offering,” Viva Energy CEO and managing director Scott Wyatt says.

“As our stores increasingly become retail destinations, we expect convenience earnings will grow and reduce our dependency on traditional fuels.

“OTR outlets offer an attractive and welcoming store environment, supporting increased dwell time, which is likely to be a key factor in successfully introducing electric vehicle recharging facilities over time.”

Wyatt says that over the past three decades the Shahin family has built OTR into one of the most successful integrated convenience and fuel offerings in Australia.

“We are excited about the opportunity we have to take this proud South Australian business and brand nationally and are pleased to have Yasser Shahin work with us as we commence this journey,” he says.

“We also look forward to welcoming approximately 6,500 OTR team members to the Viva Energy business, learning from them and working with them to lift the standard of convenience retailing in this country.”

Shahin says: “The announcement marks an incredibly exciting time for our company. This transaction delivers the realisation of the vision I have always had, and vigorously pursued; to see OTR become national, to be the leading convenience brand in Australia and to remain true to our roots and based in Adelaide.”

“The coming together of one of Australia’s best retail networks with one of Australia’s leading convenience offerings has enormous industrial logic.

“I will continue to support the business following completion of the transaction, and the entire team and I are completely committed to the successful integration of these businesses. The Shahin family is committed to continuing to see Adelaide as the home of OTR and Viva Energy have provided for the realisation of a larger, enhanced OTR to continue to be headquartered here.”

  1. Australian Truck Radio Listen Live
Send this to a friend