EG Group, the forecourt operator whose billionaire founders recently acquired Asda, has bought healthy fast-food chain Leon for £100m.
Founded in 2004, Leon tapped into demand for healthier food, growing to a total of 71 company-owned and franchised restaurants, mainly across the southeast of England and a handful of European countries. However, the business, which generated sales of £115m in 2019, launched a restructuring plan at the end of last year to help it survive the drop off in trade during the pandemic.
In a joint statement, EG’s Mohsin Issa and Zuber Issa said Leon was a “fantastic brand we have long admired”. The firm plans to use the chain to support the expansion of the food offer on its forecourt sites.
EG already operates more than 700 food outlets in the UK and Ireland, including branches and drive-thrus for KFC, Starbucks, Subway, and Greggs.
The group stated that it was committed to keeping Leon’s management team and staff, with plans to open around 20 new Leon outlets a year from 2022. It also cited the importance of Leon’s own brand range of food that is currently sold exclusively by Sainsbury’s.
Leon was majority-owned by two private equity firms, Active Partners and Spice Private Equity, with stakes of 30% and 40% respectively. The chain’s founder John Vincent also held a 15% share.
The move comes ahead of Competition & Markets Authority’s (CMA) decision due tomorrow on whether the sale of a majority stake in Asda to the Issa brothers and TDR Capital can be signed off on its current terms. The retailer has been operating independently from its buyers whilst the CMA conducts its investigation.
The Issa brothers, whose EG business now has more than 6,000 sites across 10 countries, have been on a buying spree in recent years and were recently linked to a bid for Caffè Nero.
In January, EG recruited the industry veteran Stuart Rose as its Non-Executive Chairman to boost its corporate credentials at a time when its rapid expansion had landed the company with more than £7bn of debt.
NAM Implication:
- Obviously (!) someone is keeping an eye on overall debt build-up…
