Euro Garages in £50m Esso swoop
Blackburn based Euro Garages has acquired 45 company-owned service stations from Esso in a deal thought to be worth around £50m.The sites, based in the North West, North East, Yorkshire and North Wales, take the total number of service stations owned and operated by Euro Garages to around 120, making it one of the UK’s largest independent operators.
The companies have entered into a long-term fuel agreement and customers can expect the same buying experience at these Euro Garages sites under the Esso brand. The portfolio’s existing retail space will be converted to SPAR-branded convenience stores over the coming months.Mohsin Issa, managing director of Euro Garages, said: “This is a transformational acquisition for our business, which accelerates our consolidation strategy in the UK and increases our presence in a number of important regions. It also fits perfectly with our retail proposition, which is based on partnering with quality brands to offer our customers the very best experience and value across our forecourts.”
Zuber Issa, chief executive, added: “This acquisition adds a collection of premium location sites to our portfolio, providing considerable opportunity for further development and value creation in the estate alongside our partnership brands. It also brings a team of skilled, customer-focussed employees who will be crucial to our continued commitment to service on the front line.”Paul Foster of Lloyds Bank Commercial Banking in the North West, which worked with Handelsbanken in Blackburn to arrange funding for the acquisition, said: “While many businesses in the sector are hunkering down in the face of challenging conditions, Euro Garages is a prime example of a business with the confidence to invest in order to drive its growth strategy. We’re keen to show our commitment to backing mid-market companies like Euro Garages, where our support and expertise can help support economic growth in the regions.”
Phil Skupski, manager of Handelsbanken's Blackburn Branch added, "The management team at Euro Garages have an outstanding track record and we are delighted to have worked alongside Lloyds in the latest stage of their expansion."Last year, Euro Garages reported sales growth of 3 per cent to £314m (2011: £305m) in the 12 months to 31 July 2012. This included growth in the total value of fuel sales as well as a sharp increase in retail sales from its SPAR convenience stores and partner brands, which include Starbucks, Subway and Burger King. In 2012, the business announced a five-year agreement with Starbucks to open 100 additional drive-thrus coffee outlets, with around 25 already trading successfully.
Euro Garages was founded in 2001 by brothers Mohsin and Zuber Issa, sons of Gujarati immigrants who came to Blackburn in the 1960s, following the acquisition of a single, derelict petrol filling station in Bury, Greater Manchester. Prior to that, the brothers had run a newsagents in Preston town centre while still in their teens.