EG Group Reaches Deal to Acquire Cumberland Farms
CINCINNATI — EG Group is establishing a strong presence in the U.S. Northeast. The U.K.-based retailer, parent company of EG America, entered into an agreement to acquire Cumberland Farms.
Westborough, Mass.-based Cumberland Farms operates approximately 600 convenience stores in seven Northeast states and Florida. The c-store chain began exploring a sale this spring, as Convenience Store News previously reported.
"Over nearly eight decades the Haseotes family have built Cumberland Farms into an outstanding portfolio of large, modern facilities run by a team of associates who are connected to the communities they serve. It is rare that an asset of this quality becomes available and we are delighted to have been successful in a highly competitive process," said Zuber Issa, founder and co-CEO, EG Group. "We look forward to welcoming the talented team at Cumberland Farms into the EG family."
Though firmly planted in the retail sector internationally, EG Group is a new player on the U.S. convenience store scene. It entered the channel in April 2018 when it closed on the acquisition of The Kroger Co.'s c-store portfolio.
The acquisition of Cumberland Farms will take the EG Group's U.S. network to nearly 1,700 stores, operating in 30 states and retailing over 2.5 billion gallons of fuel with merchandise sales of more than $3 billion on an annualized basis.
"We very much look forward to becoming part of the EG family, as it is clear that both Cumberland Farms and EG Group share a common vision for excellence in convenience retailing and commitment to investment in our people," said Ari Haseotes, president and CEO of Cumberland Farms.
Mohsin Issa, founder and co-CEO of EG Group called the move "a transformative one" for the company's U.S. business.
"It brings us greater scale and a well-established network in locations we do not currently serve that is highly complementary to our existing U.S. store footprint. We believe that the Cumberland Farms portfolio comprises some of the very best convenience stores within the USA and we are delighted they will form part of the EG family," he said.
"We will be retaining the highly regarded Cumberland Farms brand on all of the acquired stores and are actively considering the addition of Cumberland Farms products in our wider portfolio," Mohsin Issa added. "Whilst we believe EG can add a lot to the Cumberland Farms business we also recognize that EG has much to learn from it. Our group’s ability to maintain consistency in both owned and third party brand standards along with delivering the right customer experience have made EG Group a partner, and acquirer, of choice."
Morgan Stanley, Goldman Sachs, Barclays, PwC and Rothschild & Co are acting as financial advisors to EG. Allen & Overy LLP and Kirkland & Ellis LLP are acting as legal advisors to EG. RPS Gaiatech are advising the company on environmental risk management.
EG has committed financing in place to support the transaction from a bank group led by Barclays. The transaction is subject to regulatory approval and customary closing conditions.
Founded in 2001 by the Issa Family, EG Group's portfolio consists of roughly 5,200 sites across Europe, Australia, and the United States.
Following its acquisition of Kroger's c-store business, EG Group established EG America based in Cincinnati. This year alone, EG Group inked deals to add 69 Certified Oil-branded convenience stores and gas stations, and 54 Fastrac locations, as well as its wholesale fuel business, to its EG America portfolio.
In June, the retailer unveiled its new EG America banner as it began to rebrand the 220-plus Minit Mart chain. EG acquired the chain from TravelCenters of America LLC for $330.8-million in December.
EG Group's U.S. retail arm is No. 13 on the 2019 Convenience Store News Top 100. Cumberland Farms follows at No. 14.
