Euro Garages fuels up with TDR investment

EURO Garages, the Lancashire company owned by brothers Mohsin and Zuber Issa has agreed an investment deal with a private equity firm, which is understood to value it at around £1.3bn.

TDR Capital, the London-based investment firm which owns rival company European Forecourt Retail Group, has taken a minority stake in the fast-growing business, which as well as petrol stations and related shops, operates the Rivington services on the M61.

The deal will close in December pending regulatory clearance.

Euro Garages chief executive Zuber Issa said: “We are delighted to have on board a partner with the background and experience that TDR have. This is an exciting new phase for the business and we look forward to working with TDR to grow our business further in the UK and internationally.”

Managing director Mohsin Issa: “Over 15 years we’ve built our business and a strong position in the UK forecourt retail market with our superior customer offer supported by partnerships with leading convenience and food-to-go brands. TDR understand our business and are the perfect investment partner as we continue to develop our proposition.”

It is understood the deal with TDR Capital will lead to a merger of Euro Garages with European Forecourt Retail.

The investment deal with TDR will be the largest in the region this year and make multi-millionaires of the brothers who started the business in 2001 when they bought a single petrol station near Manchester.

The company now has 360 locations and employs about 3,200 staff. It has partnerships with petrol and food brands including Starbucks, Burger King, Greggs and Subway. Revenue in the year to July 2014 was £646m and EBITDA was £30m.

A major driver of recent growth has been the acquisition of sites from energy giants Esso and Shell,  which have exited forecourt operations.

The company said it was exploring options in July, and was being advised by Rothschild.

A team led by partner Daniel Hall at Eversheds’ Manchester office advised the company.

Hall said: “This deal underlines one of Britain’s biggest business successes in recent years, and has propelled Euro Garages to become one of Europe’s leading fuel retailers. As a team we are delighted to have helped Mohsin and Zuber achieve their ambitious growth plans.”