RAMAT GAN, Israel -- EZ Energy Ltd. has signed an agreement to buy 26 unidentified gas stations and convenience stores in the United States for $24 million, plus inventory, said Globes Online.
The Israel-based firm, a holding company controlled by Eli Zahavi, is also in advanced negotiations to buy three other groups of stations and c-stores, with a total of 65 properties for $100 million. These properties generate $230 million in annual sales.
The seller fully owns the properties, which generate $87 million in annual sales, said [image-nocss] the report.
EZ Energy will set up a foreign subsidiary to handle the deal, it added. The subsidiary will also rent the seller's headquarters.
The agreement is expected to be finalized by March 12, 2007, added a report by Y Net New.com.
Oren Zahavi, the company's director, was responsible for the negotiations for the deal. If this deal comes to fruition, within a few months EZ Energy will hold a portfolio of 106 [U.S.] gas stations and convenience stores, yielding USD $370 million. We intend to finance the deal with financial investors enabling EZ to expand its service station and convenience store portfolio with relatively low investments, he told the news outlet.
In order to finance the deal, EZ Energy plans to gain capital from the Tel Aviv Stock Exchange, the report said. The company reported last week that the directorate has authorized contacts with underwriters to lead a private issue of bonds and options. The scope of the issue has still not been finalized.
EZ Energy (formerly known as Gibor Real Estate Ltd. and Adiron Investments), control of which was transferred to Eli Zahavi last year, is working to locate and purchase clusters of U.S. stations. The company's strategy is to locate clusters that ensure high yields, and at the same time try to introduce financial partners. This way, the company plans to purchase a large number of stations using relatively small equity to complete the acquisition, according to the report.
In early January, EZ Energy announced that it had signed an agreement to buy 15 unidentified stations and c-stores on the U.S. East Coast for $15 million. And in separate transaction, EZ Energy said at that time that it had exchanged draft contracts to buy three clusters of stations and c-stores for $90 million.
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