Applegreen, the Irish fuel and forecourt retail group, has walked away from a contentious 35-year deal to operate 18 motorway service areas in Massachusetts, amid continuing legal threats from the underbidder for the contract.
The Dublin-based group, which is backed by US private equity giant Blackstone, had planned to invest more than $750 million (€636 million) in the network.
Fuel supplier Global Partners, which had been seen as the favourite to be selected by the Massachusetts Department of Transport (MassDOT), has been challenging the decision in court since Applegreen was selected in June.
“After three months of good faith negotiations, Applegreen and MassDOT have not reached agreement on definitive terms for the redevelopment of 18 motorway service areas in Massachusetts,” Applegreen said in a statement.
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“The open issues have significant implications for the commercial viability of the concession award. These commercial realities have been coupled with costly and continued litigation threats from an opposing bidder that have jeopardised the project’s timeline and financing.
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“In light of these circumstances, Applegreen has terminated ongoing lease discussions.”
Global Partners vehemently contested the MassDOT bid award, claiming its offer was superior. It filed a lawsuit in a Boston court on September 15th in a bid to stop the deal going through.
In late August, Applegreen founder and executive chairman Bob Etchingham said Global Partners had engaged in a “campaign of misinformation – repeating the same falsehoods and baseless allegations in an attempt to reverse a process that was fair [and] supported by third-party experts".
Applegreen entered US market in 2014 when it bought two sites in Long Island.
In 2020, the group was part of a consortium that signed a 33-year lease to refurbish and operate 27 motorway plazas on New York Thruway, a system of toll roads within the state of New York. It does not have the fuel sale element of that deal.
Applegreen runs more than 100 US motorway service areas, where it operates restaurant and cafe brands such as Burger King, Shake Shack, Chick-fil-A, Popeyes, Starbucks, Dunkin’, Panera Bread and Panda Express.
The company was founded by Mr Etchingham in 1992 with one station in Ballyfermot, west Dublin. It now has almost 200 locations in the Irish market. The company typically invests more than €30 million a year in the Irish market on store openings, upgrades and improvement.
Applegreen was taken private from the stock market in March 2021 by Blackstone in a €718 million deal that saw Mr Etchingham and long-standing executive Joe Barrett retain a combined 42.5 per cent stake in the group.
Applegreen sold its British filling station business to rival EG On The Move earlier this year for an undisclosed sum. That business had 98 sites. The company said it would use the proceeds from the transaction to invest in its business in Ireland, the UK and the US.
The deal did not affect Applegreen’s Welcome Break motorway service business in the UK, which also has a network of 31 hotels.
