Photograph courtesy of EG Group
EG Group Ltd. has completed the sale of its remaining U.K. forecourt business and other standalone foodservice locations to co-founder and previous CEO Zuber Issa, the brother of CEO Mohsin Issa, the company said in its third-quarter trading report.
Mohsin Issa is now the sole CEO.
Blackburn, U.K.-based EG Group, owns Westborough, Massachusetts-based EG America LLC, which operates the Cumberland Farms and other U.S. convenience-store chains, including Turkey Hill, QuikStop, Fastrac, KwikShop and more.
The company announced the sale, and the transition of CEOs, in its first-quarter 2024 trading report. Global retailer EG Group agreed to sell its more than 550-unit U.K. convenience-store and gas station business to Zuber Issa.
The transaction generated net proceeds of $342 million, which remain subject to customary closing purchase price adjustments.
“Using the proceeds from this transaction and other non-core asset disposals, the group fully repaid the bridging facility in November 2024, with the remaining proceeds to be used to repay senior debt,” said Mohsin Issa. “A number of cash flow initiatives also allowed the group to repay the revolving credit facility at the end of September 2024. The group remains committed to further strengthening its balance sheet through the consistent execution of its deleveraging strategy.”
Third-Quarter Performance
The third quarter had strong performances across grocery and merchandise and foodservice segments, Mohsin Issa said.
Grocery and merchandise gross profit increased by 4% for the quarter, to $344 million, according to the company’s third-quarter trading report. This was driven by improved gross margins, with dispensed beverage initiatives in the U.S. offsetting more challenging industry-wide economic conditions in the market, according to EG America.
Foodservice gross profit increased by 4% to $117 million for the quarter, with the company’s price-focused strategy driving improved sales and marketing.
In fuel, higher volumes in France and Italy were partially offset by the U.S., where the business continues to outperform the market despite falling volumes.
EG Group had 8% growth in EBITDA to $300 million, gross profit was up 2% and earnings saw 21% growth.
Mergers and Acquisitions
On Nov. 8, the Group completed the sale of 19 of its convenience stores located in Kansas and Missouri, which operate under the Minit Mart banner, for net proceeds of $21 million.
Separately, in June, the Group agreed to sell 39 of its convenience stores located in Illinois, for net proceeds of $38 million. The transaction is expected to be completed this month.
The company stated that it will achieve strong financial performance through organic growth and earnings initiatives going forward.
Founded in 2001 by the Issa family, Blackburn, United Kingdom-based EG Group is a gasoline forecourt and retail convenience operator with more than 6,200 sites across the United Kingdom and Ireland, Europe, the United States and Australia. In 2018, EG Group established itself in the United States as EG America by acquiring Kroger’s 762-site c-store networkwhich included the Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop banners. It acquired TravelCenters of America’s Minit Mart convenience-store business in 2018. The portfolio included 225 c-stores. And in 2019, among other acquisitions, EG Group acquired Cumberland Farms and its nearly 660 c-stores in the Northeast and Florida.
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