After spending the first 20 years of the century aggregating c-store chains, reports indicate that the Issa brothers of EG Group are targeting a New York-based initial public offering for U.S. station properties in 2025.
Financial newspaper reports in the U.K. indicate that EG founders Mohsin and Zuber Issa hope to file paperwork for a debut in public markets next year and expect Wall Street will value the American assets for over $15 billion.
EG Group began rolling up c-store chains in 2001 and paid some very steep Ebitda multiples for companies that included Cumberland Farms, Certified Oil, Fastrac, KwikShop, Loaf 'N Jug, Minit Mart, QuikStop, Sprint, Tom Thumb and Turkey Hill.
Earlier this fall, the company restructured some high-priced debt in a deleveraging move. In a press release, the company said EG grew underlying Ebitda on international station growth by 10% in the first nine months of 2024, The release noted that much of the strong performance was tied to extraordinary performances with U.S. assets.
Fuel margins are a likely to be a highlight if EG puts together an S-1 filing with the Securities and Exchange Commission. U.S. rack-to-retail spreads have averaged close to 40cts/gal in many markets where EG Group has critical mass.
When the Issa brothers were acquiring chains, those fuel margins tended to be under 20cts/gal.
A decision to pursue a public listing likely involves TDR Capital, the London-based private equity firm that has provided funding for many of EG's purchases. TDR Capital has about $16 billion in assets under management.
U.S. markets have been quite warm to investment in the public c-store space this year. Two of the largest convenience retailers -- Casey's and Murphy USA -- have seen respective share prices rocket 44.5% and 38.9% year to date.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
-- Reporting by Tom Kloza, tkloza@opisnet.com; editing by Steve Cronin, scronin@opisnet.com
(END) Dow Jones Newswires
December 30, 2024 15:44 ET (20:44 GMT)
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