Blackburn’s EG Group in $305m US acquisition

Zuber and Mohsin Issa of EG Group

Blackburn-based petrol station and convenience store giant EG Group announced on Tuesday a further expansion in the United States with the acquisition of 225 Minit Mart branded convenience retail stores and gas stations and related assets from TravelCenters of America LLC.

“The purchase price for the acquisition, before working capital adjustments, is $305m with the Minit Mart business having recorded an audited FY2017 four-wall EBITDA of $43m,” said EG Group.

“With EG Group expecting annual synergies in the region of $20m, post-synergy acquisition multiple for the deal is in the region of five times.”

EG Group said Minit Mart operates across nine Midwest US states that are highly complementary to EG Group’s existing US operation. 

The acquired business employs almost 2,500 people and generated full-year 2017 revenue of $720 million.

Earlier this year, EG Group acquired a 762 site convenience store business in the United States from Kroger Co., operating under the banner names of Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop.

As part of the Kroger Deal, EG Group established its North American headquarters in Cincinnati, Ohio.

With the inclusion of the Minit Mart portfolio, EG Group will own and operate about 1,000 sites in the US. 

Barclays Bank plc acted as M&A advisers to EG Group and have also underwritten the debt financing for the deal.

Legal advisors to EG Group are Eversheds Sutherland LLP for M&A and Kirkland & Ellis LLP for banking & finance.

Privately-held EG Group was founded with a single filling station in Bury as Euro Garages in 2001 by brothers Zuber and Mohsin Issa.

Zuber Issa, founder and co-CEO, EG Group, added:“For the past 17 years, we have had a vision of becoming a leading gas station-convenience store operator around the world.

“This is another exciting international milestone on our growth journey.

“The MinitMart acquisition will underpin a more sustainable network, allow us to explore further real estate development prospects and more importantly provide further growth opportunities in the USA for all our colleagues.

“We all look forward to welcoming the talented people at Minit Mart into the EG Group family and will work together to provide customers with an even better retail experience by expanding our convenience store proposition.”

Mohsin Issa, founder and co-CEO, EG Group, said: “We have a firm commitment to growing our presence in the USA, the world’s largest convenience market and are extremely pleased to have signed definitive transaction documents to acquire the MinitMart network from TravelCenters. 

“The Minit Mart portfolio will be a strong addition to our business.

“Our group’s ability to maintain consistency in brand standards along with delivering the right customer experience have made EG Group a partner of choice. 

“Our proven track record of developing similar portfolios, creating career opportunities and being able to leverageour relationships with leading retail brands to meet customer needs and align with market trends is second to none.”

The transaction is subject to regulatory approval and customary closing conditions.