Mohsin and Zuber Issa, the entrepreneurial duo behind the global convenience store and gas station giant EG Group, are reportedly preparing to take the company public in the United States, aiming for a valuation as high as $14.3 billion. This potential initial public offering (IPO), slated for 2025, marks a significant step for the brothers who transformed a single gas station in Greater Manchester into an international retail empire. The IPO, if successful, would represent a substantial return on investment for the Issa brothers and their co-owner, private equity firm TDR Capital. While still in its formative stages, the move signals EG Group’s increasing focus on the American market, which has become its largest and most crucial territory. While the company has remained tight-lipped about the potential listing, the news has sparked considerable interest in the financial world.
The potential $14.3 billion valuation reflects a multiple of 13 times EG Group’s 2023 underlying earnings of $1.1 billion, a testament to the company’s rapid growth and profitability. This growth trajectory is underpinned by the company’s impressive 2023 revenue of $28.3 billion, highlighting its robust operational performance across its global footprint. The proposed U.S. listing would not only provide a significant influx of capital for EG Group but also represent a substantial personal windfall for the Issa brothers and TDR Capital through the sale of a portion of their existing stakes. The choice of a U.S. listing further underscores the strategic importance of the American market for EG Group’s future expansion plans.
The decision to list in the U.S. rather than the UK, where the company originated, adds to the growing trend of companies opting for American exchanges. The London Stock Exchange has faced challenges in recent years, witnessing a decline in new listings as businesses gravitate towards the deeper and more liquid U.S. markets. This trend has been exacerbated by several high-profile companies, such as construction equipment rental group Ashtead, choosing to move their primary listings across the Atlantic. For EG Group, the U.S. listing aligns with its operational focus, considering its extensive network of convenience stores and gas stations across 30 states. The U.S. market’s size and growth potential likely outweigh the benefits of listing closer to the company’s historical roots.
EG Group’s journey from a single petrol station in 2001 to a potential $14.3 billion IPO is a remarkable story of entrepreneurial vision and strategic execution. The Issa brothers, children of Indian immigrants, identified an opportunity in the changing landscape of the fuel retail industry. As major oil companies divested their retail operations to focus on upstream activities, the Issas strategically acquired these divested gas stations and transformed them into multi-faceted convenience hubs. Recognizing the captive audience of motorists stopping for fuel, they expanded their offerings to include fast food, groceries, and other merchandise, creating a one-stop shop for drivers. This innovative approach proved highly successful, laying the foundation for the company’s rapid expansion.
The partnership with TDR Capital in 2015 further accelerated EG Group’s growth trajectory. The private equity firm’s investment enabled the company to pursue aggressive acquisitions and expand its operations internationally. Currently, EG Group operates over 5,500 convenience stores and gas stations across nine countries, a testament to its ambitious expansion strategy. Notably, the company no longer operates in Britain, having divested its UK assets to focus on its international portfolio, further highlighting the shift in its strategic focus.
EG Group’s extensive presence in the U.S. includes almost 1,500 convenience stores spanning 30 states, operating under a diverse portfolio of well-known brands such as Cumberland Farms, Certified Oil, Fastrac, Kwik Shop, Loaf N’ Jug, Minit Mart, Quik Stop, Sprint, Tom Thumb, and Turkey Hill. This wide geographical reach and brand recognition position the company strongly within the competitive U.S. convenience store market. The potential IPO is expected to further fuel EG Group’s growth ambitions, allowing it to invest in strategic initiatives, expand its footprint, and solidify its position as a leading player in the convenience retail sector. The IPO also marks a significant milestone for the Issa brothers, validating their entrepreneurial vision and solidifying their position as major players in the global retail landscape.
