Asda’s new owners expand portfolio with acquisition of LEON Restaurants
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The Issa brothers who acquired Asda last year have expanded their portfolio with a £100m deal for prominent British fresh fast food restaurant chain LEON.
Founded by John Vincent, Henry Dimbleby and chef Allegra McEvedy in 2004, the London-based chain created the category of ‘naturally fast food’, changing people’s expectations of what was possible in quick service restaurants.
The company has been the pioneer in creating a healthy menu that tastes good and is kind to the planet, driven by a passion to help everyone eat and live well.
With an extensive network of more than 70 restaurants, LEON has 42 company-owned restaurants operated on leasehold locations, with a particularly strong presence in London as well as other large cities across the UK. Its sole Yorkshire outlet is at the Extra Motorway Service Area at Junction 45 of the M1.
In addition, it has 29 franchised sites at key strategic transport hubs – mainly airports and train stations – across the UK and five other European markets, principally The Netherlands.
LEON has also made itself accessible to consumers at home and generates significant revenue from its branded cookbooks, own brand groceries and provision of home delivery ready meals.
The acquisition of LEON by the brothers’ petrol forecourt business EG Group is complementary to its strategy of seeking significant growth in its non-fuel and foodservice operations.
Prior to the addition of the LEON store network, EG Group already operates more than 700 foodservice outlets in the UK & Ireland of which 310 operate from standalone premises.
Despite the impact of Covid-19, EG Group’s foodservice business accounted for 46% of the gross profit of the UK&I division in 2020.
The acquisition of LEON as a proprietary brand enhances the already extensive foodservice brand portfolio operated by EG Group, with this already including third party brands such as Starbucks, KFC, Burger King, Greggs, Sbarro, Cinnabon and Subway.
Following the acquisition, EG Group intends to invest in the LEON brand and broaden the current foodservice offer across the extensive global site network.
With plans to open around 20 LEON sites per year from 2022, EG Group also sees significant potential for LEON’s non-restaurant products across its convenience retail proposition.
Mohsin Issa and Zuber Issa, co-founders and co-CEOs of EG Group, said: “LEON is a fantastic brand that we have long admired.
“As established entrepreneurs in the foodservice retail market ourselves, we have a huge admiration for the business that John and the LEON team have built over the years, and firmly believe that their culture and values closely align with our own.
“The acquisition of LEON presents EG Group with a fantastic opportunity to further develop the menu offer, the various concession formats including drive thrus, and will enable us to significantly build on the existing network by exploring opportunities across our own sites along with other strategic locations.”
The international forecourts business has grown its portfolio of companies around the world, and last October acquired the ASDA Supermarked business in a £6.8bn deal. In February this year EG announced annual revenues of £20.687bn and EBITDA of £1.272bn, a 48% increase.
The Issas added: “EG Group continues to identify innovative partnerships and acquisitions that complement our existing consumer offer and enable us to stay at the forefront of consumer trends, particularly in foodservice.
“Our equity investment in LEON is to strengthen our own participation in the fast growing contemporary foodservice segment. This acquisition aligns with our commitment to being a committed foodservice operator globally, delivers financial benefit to our underlying business, and supports broader commercial strategies to be able to better realise further growth opportunities.”
John Vincent, LEON chief executive, said: “In some ways this is a sad day for me, to part company with the business I founded 17 years ago in Carnaby Street.
“But I have had the pleasure of getting to know Mohsin and Zuber across the last few years. They have been enthusiastic customers of LEON, going out of their way to eat here whenever they visit London.
“They are decent, hard working business people who are committed to sustaining and further strengthening the values and culture that we have built at LEON, a business that has my Dad’s name above the door.”
He added: “Mohsin and Zuber will not just be superb custodians of the LEON brand, through EG Group they have the vision, investment appetite, foodservice expertise and network scale to take LEON to many more people and places.
“This is what LEON has always been built for and I am confident under the new ownership, the brand will flourish and have even greater appeal to a broader customer base, especially outside of London.
“Thousands of people have been part of creating LEON experience. Each has left their mark, and I would like to thank everyone inside LEON, our partners and suppliers, and our guests who have visited us around 200 million times so far.
“We have tried hard, done some good things, made a healthy amount of mistakes, and built a business that quite a few people are kind enough to say that they love.”
Aside from its restaurants, the LEON brand has also launched a grocery range in Sainsbury’s supermarkets and a kitchenware and cookware range with John Lewis.