Z Energy has agreed to buy Chevron New Zealand's Caltex-branded network for $785 million, and plans to raise $185 million in new capital to help fund the acquisition.
Wellington-based Z Energy expects to benefit through procurement, operating cost and supply chain efficiencies under a common ownership, it said. The transaction will be funded through existing cash and debt, and Z said it will probably raise new equity in an underwritten pro rata share issue closer to the settlement date. The purchase price is 5.9 times Caltex's 2014 replacement cost operating earnings before interest, tax, depreciation, amortisation and fair value movements of $132 million.
A Caltex factsheet says it has 147 outlets in New Zealand, supplies fuel to the aviation and shipping industries and is a partner in the AA Fuelcard loyalty scheme. Z Energy is a shareholder in the rival FlyBuys scheme and its website says it has more than 200 outlets.
The deal is subject to permission from the competition watchdog, the Commerce Commission and consent from the Overseas Investment Office.