Petrol station tycoons behind EG Group Sprint to land $300m US acquisition

The petrol stations giant founded by two Blackburn-based brothers is closing in on a $300m US acquisition, the latest in a string of purchases aimed at expanding its foodservice operations.

Sky News understands that EG Group is nearing a takeover of Sprint Food Stores, which will add 34 fuel and convenience store sites to its growing American empire.

Sources said the deal, which could be finalised within days, would expand EG's presence to 33 US states, encompassing 1,750 sites, making it one of the largest British-owned retail empires on the other side of the Atlantic.

The deal will be another significant acquisition for Mohsin and Zuber Issa, the entrepreneurs who spearheaded the joint purchase last year of Asda, one of Britain's biggest supermarket chains.

They acquired Asda for nearly £7bn alongside TDR Capital, the private equity fund which is the biggest external shareholder in EG Group.

EG's latest purchase comes weeks after media reports suggested that the company had hired a number of investment banks to assist it with a strategic review that could ultimately lead to a sale of parts or all of the business.

Last month, Asda and EG said that a deal for the former to offload its petrol stations to the latter had collapsed.

The decision prompted Asda to take on additional borrowing.

The company has moved to address concerns about corporate governance in the last 12 months by strengthening its board with the addition of Lord Rose, the former Marks & Spencer and Ocado chairman, as its chairman, and Dame Alison Carnwath, a former director of Barclays and BP.

Together with TDR, the Issas have built EG into one of the world's largest operators of petrol forecourts, with operations in ten countries and 44,000 employees.

The company is acknowledged in the industry as a pioneer in its approach to branded convenience retailing at its sites, a strategy which has generated industry-leading returns.

EG has expanded steadily through a string of acquisitions, and now operates approximately 6000 sites in ten countries, serving more than a billion customers annually.

EG Group's new auditors, KPMG, are understood to have signed off its 2020 accounts in recent weeks, with results showing record earnings before interest, tax, depreciation and amortisation of around $1.4bn.

The company declined to comment on the Sprint Foods deal.