December 16, 2007
Matthew Goodman
THE Asian entrepreneur Zuber Issa and his family are in line to collect a £90m windfall after putting up for sale the chain of petrol stations they have built up over the past six years.
Issa, 35, founded Euro Garages in 2001 when he bought his first three filling stations, and has steadily grown the operation to the 70 sites it encompasses today. The business is believed to be one of the top three independent groupings.
The company, which featured in last year’s Sunday Times Fast Track survey of Britain’s fastest-growing private companies, generated earnings before interest, tax, depreciation and amortisation of about £10.5m.
Euro Garages is based in Darwen, near Blackburn, Lancashire, and employs 400 people. It is estimated to be worth about £90m, although any buyer would have to assume its net debt of £25m. That gives it an enterprise value of £115m.
The corporate-finance arm of KPMG, the professional services firm, has been appointed to handle the sale process on behalf of the family.
Issa has built the business by concentrating on buying run-down garages from the big oil companies and upgrading them. They trade under the oil majors’ brands, including Shell and BP.
He has also added a decent retail offering to the sites, often under the Spar brand. But his stores refrain from selling alcohol because of his strict religious beliefs.
In most cases, Euro Garages owns the freeholds of its operations. The business has expanded out of its northwest England heart-land and also has a strong presence in the Midlands.
Several parties are understood to have expressed interest in bidding for the business. These are said to include both private-equity investors and trade buyers.
Petrol stations have proved lucrative assets for property investors.
For example, last September, Palmer Capital Partners, an investment group, sold an estate of 85 petrol stations leased to Somer-field for £175m.
Robert Tchenguiz, the property tycoon best known for owning stakes in companies such as the supermarket group J Sainsbury and Mitchells & Butlers, the pub operator, has also enjoyed considerable success by investing in the sector.
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article3055781.ece
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