Viva Energy Limited’s acquisition of a 50% interest in Westside Petroleum
VCF Capital acted as financial advisor to the shareholders of Westside Petroleum on the sale of a 50% interest to Viva Energy.
$45 million | August 2018
Company Overview
Westside Petroleum (Westside) operate a retail network of more than 50 service stations across NSW, Victoria and Queensland displaying a mix of Shell and Westside branding.
Founded in 2011, the majority of Westside’s sites are either under franchise or commission agent arrangements with Westside entering into 50 year leases with a landlord and 10 to 15 year leases with sub operators.
Westside sells 120 million litres of fuel per year with a focus around premium fuels, particularly diesel, with a medium-term plan to develop a national network of high-quality service stations at strategically located sites with over 30 pipeline sites and a further 20 in the early stages of negotiation.
Background
VCF Capital was engaged as an exclusive financial advisor to Westside to raise capital to enable shareholders to not only de-risk but also source an investor to raise the necessary expansion capital to continue to finance its short to medium-term growth plans.
Transaction Summary
On 31 August 2018, Viva Energy (Viva) acquired a 50% non controlling shareholding in Westside Petroleum for cash consideration of $15 million with a call option to acquire the remaining 50% interest in Westside with the exercise price being an amount determined by reference to an earnings-based formula.
The transaction implied an enterprise value of $45 million with Viva also committing a further $10 million in expansion capital to assist Westside with its network rollout.
Outcome
VCF Capital managed a process that saw significant interest received from domestic and international investors and trade buyers arising from VCF Capital’s network and translated into a transaction with Viva which met Westside and its shareholders’ objectives.
The transaction enabled the shareholders of Westside to de-risk whilst partnering with a trade investor to enhance Westside’s ability to continue to provide quality fuel products to the retail market and deliver growth from its high-quality network and pipeline of future service station sites.