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NEW YORK -- This week has been an active one for Israel-based companies with operations in the U.S. convenience industry, as one company paid $23.5 million to acquire 21 c-stores in Virginia and Tennessee, while another company called off a $24 million acquisition for 26 c-stores, due to failure to meet contractual terms.
Empire Petroleum Holdings LLC, the subsidiary of Isal Amlat Investment Ltd., bought a 50 percent stake in 19 independently owned gas stations in the U.S., along with long-term leasing rights for two others for $23.5 million, Globes Online reported.
As CSNews Online reported first in a news flash yesterday, 18 of the properties are in Virginia and the remaining stations are in Tennessee. Many of the properties have car washes, and all of the locations include convenience stores. The properties -- many of which are located along Interstate 81 in the two states -- saw $80 million in revenue in 2005 and 2006, and a pretax profit of $3.8 million in 2005 and $3.8 million in 2006, the report stated. The company expects to close the deal by the end of this year.
As part of the transaction, Empire Petroleum now holds the right to supply 30 million gallons of gasoline annually to the 21 stations, as well as four additional stations, according to the Globes Online report.
CSNews Online previously reported in early August that Isal Amlat Investment Ltd. paid $6 million for a 50 percent stake in Empire Petroleum, which has long-term contracts to supply 65 million gallons of fuel annually to 140 gas stations on the East Coast.
Meanwhile, the acquisition of Harper Oil and its 26 Harper on the Way gas stations has been cancelled by EZ Energy Ltd., as Harper Oil notified EZ Energy that it failed to meet contract terms, Globes Online reported.
As CSNews Online also reported first in a news flash yesterday, the deal was announced in January and set to cost EZ Energy $24 million plus inventory.
A report by Isreali news Web site, Ynetnews.com, stated termination was due to the two companies disagreeing over the acquisitions' implementation, with the seller claiming EZ Energy failed to meet some the deal's terms, while the Israeli company accused Harper Oil of breaching the contract.
CSNews Online previously reported the Harper on the Way stores would maintain their banner, and Harper Oil, a more than 70-year-old, family-owned company, would remain headquartered in Springfield, Ill. As part of the agreement, EZ Energy also planned to lease the company's headquarters, Harper Oil CEO Chris Sommer told CSNews Online when the deal was announced.
The transaction would have promoted Sommer to CEO of EZ Energy USA, with day-to-day responsibilities of the existing business operation, as well as future acquisitions.
A call to Sommer seeking comment was unreturned by presstime.
EZ Energy had planned to own 200 gas stations and convenience stores in the U.S. by the end of 2007, and 500 properties by the end of 2008, the Globes Online report stated. In the past three months, the company has purchased 24 c-stores in the U.S. and signed agreements to acquire 14 others, the report stated. The company added in a note to investors it is seeking more U.S. properties through its subsidiary, EZ Energy USA Inc.