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Private equity-backed gas station company EG Group has fired the gun for an initial public offering in New York, expected to come early this year.
The initial public offering, which could value the business at around $13 billion, will allow TDR Capital to release one of its investments more than a decade after it first backed Issa's Blackburn brothers.
Zuber Issa, who founded EG with his brother Mohsin but stepped down from management last year, told the Sunday Times newspaper that “the road map is starting now” for the IPO, which is expected to happen this year or next, after considering various options. in the group for a while.
EG will float under the name of Cumberland Farms, the US grocer it bought in 2019, a person familiar with the matter confirmed.
The decision of two UK entrepreneurs and TDR to list their businesses in the US will be one thing on the London stock market, which is facing a drought of new offerings and high defaults.
The brothers started with a single petrol station, near where they grew up in Blackburn, Lancashire in 2001. up and TDR.
TDR and Issas now own about 50 percent of EG each.
Zuber said the choice of New York was driven by the fact that despite the company's roots in the north of England, more than half of its revenue is now in the US.
He also cited the presence of other North American-listed rivals, such as Canada Alimentation Couche-Tard and Nasdaq-listed Casey General Stores, which makes it easier for investors to measure performance. In 2022, there is it was a guess that Alimentation Couche-Tard and EG were in merger talks.
“If we still had (most) of our assets in the UK, we would be looking more at a UK IPO,” Zuber told the Sunday Times.
EG no longer owns any UK stores and petrol fronts, after selling most of them to supermarket group Asda, a sister business also owned by TDR Capital and Mohsin.
EG, where Zuber remains a shareholder and non-executive director, posted a profit of less than 1.1bn in the year to 31 December 2023, on revenues of 28.3bn. It also cut its debt load from about $10 billion in January 2023 to $5.3 billion at the end of September last year.
Although the brothers had an agreement to buy Asda from Walmart through TDR in 2020, Zuber sold his stake to a private equity group last year, making the split official.
Zuber suggested that his reason for stepping down from EG was driven by TDR's desire to pursue an IPO at a faster pace than he was comfortable with. Mohsin now runs EG as the sole chief executive.
“TDR has supported EG since 2014 and anything that EG (does) is driven by the board and the decision taken by the company,” said a person close to TDR.
“The notion that this is driven by shareholders is far-fetched. It's not about exiting, it's about setting the business up for the next (stage) of growth.”
TDR and EG declined to comment.