Issa Brothers’ EG Group Fuels Up for a Potential $14.3 Billion US IPO
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 a US listing that could value the business at a staggering $14.3 billion. This potential move marks a significant milestone in the remarkable journey of the Issa brothers, who transformed a single gas station in Greater Manchester into a multinational retail empire. While still in its nascent stages, the proposed initial public offering (IPO), slated for 2025, is expected to generate substantial interest from investors, drawn by EG Group’s robust financial performance and its dominant presence in the lucrative US market.
The whispers of a US listing, reported by Mergermarket and The Telegraph, indicate that EG Group is actively engaging with banks to facilitate the IPO process. Should the listing proceed as planned, it would represent a significant win for the US stock exchanges and a simultaneous blow to the London Stock Exchange, which has been grappling with a decline in high-profile listings. EG Group’s decision to choose the US as its listing destination underscores the increasing importance of the American market to the company’s overall strategy. The US represents EG Group’s largest single market, boasting nearly 1,500 convenience stores across 30 states, operating under a diverse portfolio of well-known brands including Cumberland Farms, Certified Oil, Fastrac, Kwik Shop, and Turkey Hill.
The potential $14.3 billion valuation underscores the impressive growth trajectory of EG Group. This valuation represents a multiple of 13 times the company’s underlying earnings, which are projected to reach $1.1 billion in 2023. With revenues of $28.3 billion generated last year, EG Group has demonstrated its ability to consistently deliver strong financial results. The IPO would provide the Issa brothers and their co-owner, private equity firm TDR Capital, an opportunity to unlock significant value from their investment. By selling a portion of their stakes to public market investors, the trio could reap substantial financial rewards from their years of strategic leadership and expansion.
The story of the Issa brothers is a testament to entrepreneurial vision and astute business acumen. The sons of immigrants who arrived in Blackburn, England from Gujarat, India in the 1970s, Mohsin and Zuber Issa started their retail journey with a single gas station acquisition in 2001. Recognizing a gap in the market, they transformed traditional gas stations into multifaceted convenience hubs, offering a wide array of fast food, groceries, and merchandise to cater to the needs of passing motorists. This innovative approach proved highly successful, enabling them to rapidly expand their footprint through the acquisition of gas stations divested by major oil companies shifting their focus to production and refining.
The partnership forged with TDR Capital in 2015 further accelerated EG Group’s expansion, propelling the company onto the global stage. Today, EG Group operates over 5,500 convenience stores and gas stations across nine countries. Interestingly, despite their British roots, EG Group no longer operates any sites in Britain. The decision to focus on international markets highlights the company’s global ambitions and its pursuit of growth opportunities in key regions around the world. The proposed US IPO signifies the next chapter in the remarkable evolution of EG Group, potentially solidifying its position as a major player in the global convenience retail sector.
While EG Group has declined to comment on the IPO reports, the potential listing has already generated considerable buzz within the financial community. Investors will be closely watching for further developments and official announcements regarding the IPO timeline and valuation. The success of the offering will depend on a variety of factors, including market conditions, investor appetite for retail stocks, and EG Group’s ability to continue delivering strong financial performance. If the IPO proceeds as planned, it will not only be a landmark moment for the Issa brothers and TDR Capital but also a significant development for the US stock market, potentially attracting a new wave of investors eager to participate in the growth of a global retail powerhouse. The listing could also serve as a catalyst for further consolidation within the convenience store industry, as competitors seek to emulate EG Group’s success and capitalize on the growing demand for convenient, on-the-go consumer experiences. The future of EG Group looks bright, fueled by the ambition of its founders and the potential injection of capital from the public markets.
