EG Group agrees $1.5bn sale and leaseback of certain USA assets to pay down debt
EG Group has agreed to the sale and leaseback on a portfolio of its sites on the east coast of the USA to Realty Income Corporation for a gross consideration of approximately $1.5bn.
This portfolio – which EG America will continue to operate and trade – comprises 415 store assets under the Cumberland Farms, Fastrac, Tom Thumb and Sprint banners.
Blackburn-based EG Group received a high degree of interest from multiple blue-chip investors and attractive terms for the transaction.
The transaction is expected to close in the second quarter of 2023, subject to customary closing conditions, and the group will use net proceeds to repay debt.
The assets represents approximately 15% of the group’s total freehold property in 10 markets, reflecting how its estate continues to be underpinned by strong asset backing globally.
Following completion, EG will pay an initial rent of $103m per annum with respect to these assets. Further information will be provided to investors in EG Group’s fourth quarter and full-year 2022 trading update call on March 9, 2023.
The group said this transaction is in line with management’s commitment to reduce total net leverage through debt reduction and free cash flow generation, as communicated in EG Group’s third quarter trading update in November 2022.
Zuber Issa, co-founder and co-CEO of EG Group, said: “Today’s announcement demonstrates the progress we continue to make to put in place a robust capital structure for the medium term that will underpin our long term strategy and represents an important first step in this process.”
New York Stock Exchange-listed Realty Income is an S&P 500 company structured as a real estate investment trust.
Its monthly dividends are supported by the cash flow from more than 12,200 real estate properties primarily owned under long term net lease agreements with commercial clients.
EG was advised by Eastdil Secured, the global real estate investment bank, alongside Barclays, Latham & Watkins, Skadden, Arps, Slate and Meagher & Flom, Rothschild & Co, and EY.
In 2021 EG Group acquired a majority stake in supermarket chain Asda in a highly leveraged £6.8bn deal, backed by their principal funder TDR Capital.
The business boasts global revenues of $26.5bn and profits of $1.7bn.
