Applegreen expands in US with New York deal

Applegreen: New deal expands its presence in the US.

Irish forecourt and motorway services station operator Applegreen has expanded its presence in the US by joining a consortium that will operate 27 motorway service areas in New York.

Applegreen is expected to take a minority stake in the consortium, which is headed by UK public sector infrastructure group John Laing.

The consortium has been awarded and has signed a conditional 33-year lease for the design, construction, financing, operation and maintenance of the service stops along the New York State Thruway. 

The 570-mile highway is the longest toll road in the US, handling around 250 million car trips per year.

It plans to invest $300m (€254m) over the next five years. Applegreen will operate all 84 food and beverage outlets and a retail store on each site.

“This is another significant strategic step for the company [Applegreen] and follows last year’s deal to expand into the highway service areas in Connecticut. It will further increase the group’s exposure to non-fuel food and beverage as well as boosting its presence in the highly regulated US motorway service areas,” said Goodbody analyst Jason Molins.

“In addition, with high levels of traffic volumes on the New York Thruway, it should deliver attractive returns for the group,” he said.

In their current guise, the existing 27 sites generated around $118m in food, beverage and retail revenue last year. 

The investment in the upgrade of the sites will be the first major overhaul of them since the late 1980s/early 1990s. This will be funded by a mix of debt and project finance debt.