Introduction to EG Group
The petrol station giant, founded in Blackburn by brothers Mohsin and Zuber Issa, will next week launch formal plans for a US$9bn (£6.7bn) initial public offering in the US.
Background and Ownership
EG Group, in which the brothers each own about 25%, has grown into one of the world’s largest multinational fuel retail companies, expanding its foodservice offerings and generating significant profits. The company is currently led by Lord Rose, the former chairman of Marks & Spencer and Asda. EG Group is about 50 percent owned by TDR Capital, the London-based private equity firm that also owns a majority stake in Asda.
Expansion and Operations
Under TDR’s leadership, EG Group has recruited an experienced leadership team led by Russell Colaco. Mr. Colaco is based in the USA, which is now the company’s largest single market. Its global headquarters will move to Charlotte, North Carolina, and although the company was incorporated in the UK, bankers say a US listing is more logical than a London IPO. In total, the EG Group employs around 33,000 people and operates around 4,300 locations. It serves 1 billion customers every year.
Financials and Restructuring
In recent years, EG has significantly reduced its debt through asset sales, including offloading the majority of its UK sites to Asda. In the UK, the company will continue to operate in around 150 Starbucks-branded stores, although these may also change hands. The group has also sold its operations in Italy, while the divestment of its Australian unit is still in the competitive approval process. A banker said the value is likely to be between $8 billion and $9 billion, taking divestments into account.
Upcoming Initial Public Offering
Banking sources said Barclays, Bank of America, Goldman Sachs, JP Morgan and Morgan Stanley were all likely to take part in next week’s selection process. The company, which may list in New York under the name Cumberland Farms, is expected to host a banking beauty parade in London ahead of its initial public offering, which is expected to take place this year.
