The seemingly unstoppable rise of petrol forecourt giant EG Group is one of the biggest North West business success stories of the 21st century so far.
Starting off with a single petrol station in Bury which was bought for £150,000, the Blackburn-based Issa brothers – Mohsin and Zubar – now control an ever-expanding empire spanning multiple continents and employing thousands of people.
The pair have even stepped out of their traditional business sector and completed the £6.8bn acquisition of Asda earlier this year, alongside TDR Capital, and invested in the likes of Manchester-headquartered sports apparel brand, Castore.
The firm reported a turnover of $20.687bn in 2020 and a huge spike in earnings before tax of $1.272bn, up from $860m.
Newly-released figures confirmed this week that the acquisition of Leon Restaurants and a continued resurgence from the Covid-19 pandemic helped EG Group’s revenue rocket by almost 60% during its latest financial period.
The group reported a total revenue of $6.511bn for the three months to June 30, 2021, up 57.7% from $4.130bn while the second quarter figures also reveal its EBITDA increased by 23.7% from $307m to $380m over the same period.
So, how have the brothers built this ever-growing empire and what’s the secret of their success?
Below BusinessLive delves into the brothers’ past and reveals the incredible journey they have experienced so far.
Mosin Issa, and his younger brother Zubar, were born in Blackburn in the early 1970s.
Their parents, Vali and Zubeda, moved to the UK from Gujarat, India, in the prior decade, initially to Bradford, to work in the textile industry before turning their hands to running a petrol station.
It was in the toilets of that petrol station that the brothers said they had the idea of transforming it into a “shopping destination”.
They realised there was little profit to be made from selling petrol but that the site had a captive market of drivers and passengers.
The idea led the brothers to save up the £150,000 they needed to buy their own forecourt in Bury in 2001.
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Their move coincided with the oil giants attempting to offload their forecourts and the brothers pressed home their advantage.
According to the Sunday Times Rich List, which was released in May 2021, the brothers’ net worth today stands at £4.68bn.
Their impact on the North West
Miranda Barker, CEO of the East Lancashire Chamber of Commerce, is no stranger to the billionaire brothers.
As a leading business figure in their home town of Blackburn, she is very familiar with the impact they have had on the local area and region as a whole.
Speaking to BusinessLive, she said: “The brothers are some of the most successful business people to have ever been produced by the region.
“They are some of our brightest stars for sure.
“They have made a real impact on the region and been great role models for people in the area.
“They are both local boys done good.
“The brothers have not just expanded for expansion’s sake. They have picked out their targets with great care and always asked what impact they can have on the local community.
“They are both quite shy and retiring and don’t do much in public; they let their business do the talking.
“They are about enthusiastic, not aggressive, acquisitions.”
The brothers continued to expand Euro Garages across the country, snapping up forecourt sites here and there where they saw an opportunity.
They formed partnerships with top brands including Subway and Starbucks and revamped their sites, which in most cases had become tired and outdated.
By 2015 the business had expanded so much that it caught the attention of private equity giant, TDR Capital.
The firm, whose portfolio also currently features the likes of David Lloyd Leisure, Keepmoat Homes and Stonegate Pub Company, took a stake in the company.
The move marked the start of a partnership which would see the fortunes of the brothers’ business transformed.
The first major change happened a year later when Euro Garages acquired the Dutch-headquartered European Forecourt Retail Group to create Intervias Group, which was later renamed EG Group.
The business had been founded in 2007 and was the European energy retail and marketing arm of Delek Group before it was acquired by TDR Capital in 2014.
At the time, EFR comprised over 1,100 retail sites in Benelux and France.
As a result the private equity firm took a 50% stake in the newly-formed group, with the Issa brothers holding 25% each.
But that was only the start of the expansion the brothers and their private equity partners had planned.
Today, EG Group has over 5,900 sites across Europe and the US and its fuel retail brands (Esso, BP and Shell) are complemented by brands such as Starbucks, Subway, Greggs, KFC, Burger King and Carrefour.
On the acquisition trail
In November 2017 the group acquired about 1,000 forecourt sites from Esso in Germany and agreed a $2.15bn deal for nearly 800 Kroger convenience stores in the following February.
Later that month, the group announced it had completed the acquisition of c.1,200 sites in Italy from Esso.
In April 2018, EG Group completed the acquisition of a portfolio of 97 sites in the Netherlands while in November 2018, Australian retailer Woolworths entered into a binding agreement to sell its 540 fuel convenience sites to EG Group for AUD $1.72bn.
A month later, EG completed its acquisition of 225 sites of Minit Mart from Travel Centers of America LLC for about US$330m.
In July 2019, EG completed its acquisition of fifty four Fastrac branded sites in the United States and announced a deal to acquire sixty nine sites operated by Certified Oil, also in the US.
In July 2019 EG Group entered a binding agreement to purchase Cumberland Farms and in March 2020, EG became KFC’s largest franchisee in the UK through the acquisition of 145 KFC outlets in the UK & Ireland.
Also last year, the group announced they were opening 150 American Bakery outlets under a partnership with Cinnabon by 2025.
But none of those deals were as large as the one that was about to come.
Owned by US giant Walmart since 1999, the Issa brothers teamed up with TDR Capital to acquire the supermarket giant in October 2020 for £6.8bn.
The deal was completed earlier this year after EG Group also agreed to buy Asda’s forecourts business for £750m in February.
The brothers made their move for Asda after the Competitions and Markets Authority rejected its merger with Sainsbury’s, a deal which is best remembered for Sainsbury’s CEO Mike Coupe being filmed singing “We’re in the Money” after the deal was initially announced.
Since the Asda deal was announced, the group also entered into a binding agreement for the acquisition of 18 locations of Schrader Oil in Fort Collins, Colorado , as well as snapping up Leon Restaurants for £100m.