Latest news with #ZuberIssa
Yahoo
21 hours ago
- Business
- Yahoo
3 Big Numbers: How EG Group is reshaping its global footprint
This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. 3 Big Numbers is a weekly column that looks at a few key details from around the c-store industry. All eyes across the c-store industry are on EG Group this week. Founder and former co-CEO Zuber Issa, who had teased a potential IPO late last year, told the Financial Times this week that the company should consider selling its U.S. arm, EG America, instead. While we wait for an announcement about either of those options, the company has confirmed its upcoming exit from Italy and Australia to relieve billions in debt.. All in all, it looks like the retailer is looking to slim down and focus on a few strong markets. In this week's '3 Big Numbers,' we explore how EG Group is reshaping its global footprint. 1,700 The number of stores in Italy and Australia EG Group agreed to sell this week. EG Group remains a global company, but its reach will become considerably smaller once these two new deals are closed. EG Group agreed to sell its 1,200 sites in Italy to a consortium made up of PAD Multienergy, Vega Carburanti, Toil, Dilella Invest and GIAP, the company announced on Monday. Then on Thursday, it revealed plans to sell its 500 sites in Australia to Ampol Limited. EG Group expects to sell these stores for an enterprise value of 425 million euros for its Italian branch and AU$1.1 billion for the Australian sites, or more than $1.2 billion combined. In both announcements, CEO Russell Colaco noted that the company isi selling off these business units to focus on areas where it sees the most growth. He did not specify which regions those are. 3% The percent of EG America's revenue that comes from foodservice. EG Group may be bowing out of other areas of the world, but it's been busy building its brand in the U.S. That has included plenty of technological upgrades in addition to zeroing in on foodservice. As of December 2024, food was a small sliver of the company's revenue, according to EG America's website. Only 3% came from foodservice, compared to 43% from fuel and 54% from grocery and other merchandise. But EG America seems to be aiming to boost that figure. Last fall, the retailer named its first vice president of food, dispensed beverage and QSR, Mendy Meriwether, and debuted three QSR concepts at a Cumberland Farms in Massachusetts. This year, the company added another food-focused executive, rolled out a new grab-and-go program and launched online ordering and delivery. With all these changes, it's not a question of will the company's foodservice revenue rise this year, it's by how much. 2 million The rough number of loyalty members in EG Group's rewards program in the first quarter. Among EG Group's moves so far this year has been the debut of its refreshed Smart Rewards loyalty program. The new program includes perks such as membership tier programs, exclusive sweepstakes and first-to-market product launches. Colaco noted in that update that EG Group was seeing 'increased basket size and larger fill-ups from loyalty customers.' That mirrors the broader trend across the industry and could encourage more shoppers to try those new foodservice options. The company had 2 million members in its revamped loyalty program in the first quarter, EG Group noted in its first-quarter trading update. That could translate to a lot of burgers and snacks. Recommended Reading Fueling Up: Should EG Group shed its US c-stores if an IPO is near? Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Fueling Up: Should EG Group shed its US c-stores if an IPO is near?
This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. Fueling Up is a column from C-Store Dive offering a fresh perspective on the top news and trends in the convenience store industry. He's no longer part of EG Group's c-suite, but Zuber Issa continues to put pressure on the company he co-founded over two decades ago. Before he and his brother resigned as co-CEOs, Issa told The Telegraph in December 2024 that they were planning to take EG Group public on the New York Stock exchange for about $13 billion pounds, equivalent to roughly $17.5 billion. A few months later, Issa told The Sunday Times that the 'road map is starting now' for the IPO, which would probably commence in 2026 and list EG Group under Cumberland Farms, its largest c-store banner in the U.S. Now, Issa appears to be changing his outlook. He told the Financial Times this week that he wants EG Group to sell its assets in the U.S. and that there are already parties interested in purchasing them. Selling these assets, including over 1,500 c-stores under several banners, would help EG Group relieve its over $5 billion in debt much faster than an IPO, Issa told the publication. As Issa continues to speak to the press, EG Group isn't talking. The company declined to comment on any speculatory IPO or sale of EG America to the outlets Issa has spoken with, and declined to speak when reached this week by C-Store Dive. Issa himself did not respond by press time when asked for comment by C-Store Dive. It's understandable for EG Group to keep quiet if either of these moves is in the works. But Issa's comments contradict what the company has done the past few years in growing its U.S. network. M&A efforts aside, EG America has revamped its digital ecosystem, overhauled its c-suite team and boosted its fresh food offerings amid efforts to unify its many c-store banners across the country. EG Group even said earlier this year that EG America has become its most profitable market. Which leads me to this: If EG Group is indeed mulling both options, how would selling EG America impact its potential IPO? Familiar territory In early 2023, reports surfaced that EG Group was looking to sell its assets in the U.S. in an effort to relieve over $8 billion of debt falling due in 2025. About two months later, the company entered into a $1.5 billion deal with Realty Income Corporation under which the real estate investment trust purchased over 400 c-stores in the U.S. and leased them back to EG America. Since then, EG Group has been on a selling spree both in the U.S. and overseas. It has sold over 100 locations across several states to Casey's General Stores and BreakTime Corner Market, spun off most of its c-store locations in the U.K. and Ireland to sister supermarket company Asda and offloaded 32 sites directly to Issa, who used the locations to launch a new banner, EG on the Run. The sales continued this week when EG Group agreed to sell its businesses in Australia and Italy for A$1.1 billion and 425 million euros, respectively, all of which will be used to repay debt, the company said in separate announcements. At the end of last year, EG Group said it had paid down a significant portion of its debts and grew underlying EBITDA by 10%, driven by growth across many of its business segments — notably the U.S. Issa told the Financial Times this week that a sale of EG America would leave the company with leverage of about three times its earnings, and that the sale would also help pay down its debts faster than if it were to IPO. Selling top-performing assets can be a 'very smart' decision for companies looking to repay debt or focus their attention elsewhere, corporate finance attorney Andrew Apfelberg, partner at Greenberg Glusker LLP, said in an interview. In EG Group's case, offloading its U.S. division — and not going public — could mean the company is refocusing on its home base of the U.K. 'It can be pretty smart to do a carve-out as opposed to selling the whole company,' Apfelberg said in reference to EG Group offloading EG America. 'Once you sell the whole company, you're sort of done — it's an all-or-nothing proposition.' EG Group could still go public on the New York Stock Exchange even if it sold EG America, said Edward Best, partner and co-chair of capital markets at Willkie Farr & Gallagher. But he added that having EG America under its belt would be wise if going public is still the ultimate plan, since investors already know the brand and its growth strategy. On the flip side, if EG Group sells its U.S. assets and still decides to go public, investors may wonder where its future growth is going to come from. 'Those are questions that people are going to ask, so I think it just raises some questions that they're going to have to answer,' he said. Editor's note: This story has been updated to note EG Group's sale of its Australian business. Recommended Reading How a sale of EG America could impact the c-store industry Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
EG Group: Billionaire Issa brothers sell £367m Italian arm
EG Group, the empire co-founded by a major investor in supermarket giant Asda, has sold its Italian division in a deal which values it at €425m (£367m). The Blackburn-headquartered group has agreed terms with a consortium of established Italian operators comprising PAD Multienergy S.p.A., Vega Carburanti S.p.A., Toil S.p.A., Dilella Invest S.p.A. and GIAP s.r.l. In a statement, EG Group said the move represented 'another positive step' in its 'ongoing strategy to focus on its core markets and strengthen its balance sheet'. EG Group was founded by billionaire brothers Mohsin and Zuber Issa and is now co-owned by private equity giant TDR Capital. Russ Colaco, CEO of EG Group, said: 'We remain relentlessly focused on driving forward EG group's growth strategy. 'This important transaction is fully aligned with this strategy, as we continue to focus on our core markets with the greatest growth potential and deliver on our deleveraging programme. 'We are grateful to our colleagues in Italy for their hard work and dedication, and we wish the business continued success in the future.' The news comes after Zuber Issa told the FT that he thought EG Group should sell its US arm instead of floating the entire group in New York. On the deal, a statement from the consortium said: 'The acquisition of EG Italia allows us to generate new and key synergies for the development of the fuel stations network with the expansion of the services offered also with a view to the energy transition. 'The EG network together with the networks of the Consortium members, all leaders in their reference territories, will enhance the know-how and skills of the EG Italia organization, heir to the culture of Esso Italiana since 2018.' The transaction is subject to antitrust and other regulatory approvals, with completion expected by the end of 2025. BofA Securities acted as exclusive financial advisors and A&O Shearman as legal advisors to EG Group on the transaction. Profit almost wiped out at EG Group In June, City AM reported that EG Group's pre-tax profit was slashed from $1.4bn to just $10m in 2024. EG Group said the change to its pre-tax profit was 'largely driven by the material exceptional gain that the group reported following the divestment of the majority of the UK business in October 2023 and the profit from the USA sale and leaseback transaction which completed in May 2023'. Before those exceptional items, the group made a pre-tax loss of $195m but it generated a profit of $205m from divestments. In 2023, the group made a pre-tax loss of $125m before exceptional items which generated a profit of $1.5bn The deal in the autumn of 2023 saw the group sell its remaining UK forecourt business and certain foodservice locations to co-founder Zuber Issa for £228m. Following the deal, Zuber Issa stepped down from his role as co-chief executive and became a non-executive director. At the same time, Zuber Issa sold his shares in Asda to TDR Capital, making the private equity giant its majority shareholder. Moshin remains a significant shareholder in Asda. The results also showed that EG Group's revenue declined from $28.3bn to $24.1m over the year. The group said its sales had declined as a result of the fall in fuel prices and the impact of its divestments over the past two years. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
- Business
- Yahoo
Zuber Issa demands petrol station empire sell off $5bn US arm
One of the billionaire brothers behind EG Group has urged the petrol station behemoth to sell off its $5bn (£3.7bn) US business in an apparent split with the company's private equity backer. Zuber Issa, who owns a 25pc stake in EG, said the company should hive off its American forecourts to a single buyer rather than pursuing a listing of the entire group as planned. Mr Issa, along with his brother Mohsin, who also owns 25pc, built EG Group from a single station in Bury, Manchester into a major empire spanning hundreds of petrol stations. EG is now 50pc owned by private equity group TDR Capital, which has been laying plans for a float of the business in New York. However, in an apparent rebuke to TDR's plans, Mr Issa has called for the separate sale of the US business rather than an outright float of the whole company. 'There are people who want to buy the US assets. It will be an auction process which would get to a clear end goal much quicker [than an IPO] and we can pay the debt off,' he told the Financial Times. 'The shareholders are still thinking about the options. Other options would be trying to sell the US in its entirety. And I think that should be an option we should do'. New ventures Mr Issa stepped down as co-chief executive of EG last year and is now a non-executive board member, focusing on his new venture EG On the Move after buying EG's last forecourts in the UK. EG Group was earlier this year exploring plans to sell off some European assets in countries like France and Germany to offload debt ahead of a stock market listing. The Blackburn-born brothers founded Euro Garages, or EG, in 2001, after acquiring a single petrol station and proceeding to buy up forecourt sites from oil giants like Esso. In 2016, they partnered with TDR Capital and merged Euro Garages with its European Forecourt Retail Group, turning it into EG Group. The rapid expansion was fuelled by borrowing, with the return of higher interest rates forcing the group to sell off parts to bring down debt. In an ill-fated venture, the Issa brothers bought supermarket chain Asda in an £6.8bn acquisition with TDR in 2021. Zuber has since sold his 22.5pc Asda stake to TDR, giving them majority control. EG Group employs nearly 40,000 people across more than 5,500 sites, serving close to 1bn customers a year. Among its operations in nine countries, the US generates the most revenue. EG Group and TDR Capital declined to comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
7 days ago
- Business
- Telegraph
Zuber Issa demands petrol station empire sells off $5bn US arm
One of the billionaire brothers behind EG Group has urged the petrol station behemoth to sell off its $5bn (£3.7bn) US business in an apparent split with the company's private equity backer. Zuber Issa, who owns a 25pc stake in EG, said the company should hive off its American forecourts to a single buyer rather than pursuing a listing of the entire group as planned. Mr Issa, along with his brother Mohsin, who also owns 25pc, built EG Group from a single station in Bury, Manchester into a major empire spanning hundreds of petrol stations. EG is now 50pc owned by private equity group TDR Capital, which has been laying plans for a float of the business in New York. However, in an apparent rebuke to TDR's plans, Mr Issa has called for the separate sale of the US business rather than an outright float of the whole company. 'There are people who want to buy the US assets. It will be an auction process which would get to a clear end goal much quicker [than an IPO] and we can pay the debt off,' he told the Financial Times. 'The shareholders are still thinking about the options. Other options would be trying to sell the US in its entirety. And I think that should be an option we should do'. New ventures Mr Issa stepped down as co-chief executive of EG last year and is now a non-executive board member, focusing on his new venture EG On the Move after buying EG's last forecourts in the UK. EG Group was earlier this year exploring plans to sell off some European assets in countries like France and Germany to offload debt ahead of a stock market listing. The Blackburn-born brothers founded Euro Garages, or EG, in 2001, after acquiring a single petrol station and proceeding to buy up forecourt sites from oil giants like Esso. In 2016, they partnered with TDR Capital and merged Euro Garages with its European Forecourt Retail Group, turning it into EG Group. The rapid expansion was fuelled by borrowing, with the return of higher interest rates forcing the group to sell off parts to bring down debt. In an ill-fated venture, the Issa brothers bought supermarket chain Asda in an £6.8bn acquisition with TDR in 2021. Zuber has since sold his 22.5pc Asda stake to TDR, giving them majority control. EG Group employs nearly 40,000 people across more than 5,500 sites, serving close to 1bn customers a year. Among its operations in nine countries, the US generates the most revenue.
