WESTBOROUGH, Mass. — In a move that a top acquiring executive is calling “transformative,” the long-rumored sale of Cumberland Farms stopped being a rumor at the end of July.
U.K.-based EG Group’s acquisition of Cumberland Farms, operator of about 560 convenience stores in seven Northeast states and Florida, came more than three months after the rumors began.
- EG Group is No. 8 in CSP’s 2019 Top 202 ranking of c-store chains by number of retail outlets. Cumberland Farms is No. 15.
In April, Oil Price Information Service (OPIS) reported that Westborough, Mass.-based Cumberland Farms had retained Bank of America to explore the possibility of selling its retail network. CEO Ari Haseotes told employees about the exploration of a sale at a company town hall meeting, OPIS said.
“The prospect of a future sale of Cumberland Farms has been bandied about among industry insiders for some time, not surprisingly since the Gulf assets were sold,” Ken Shriber, managing director and CEO of Petroleum Equity Group, Chappaqua, N.Y., told CSP at the time.
Cumberland Farms purchased Gulf Oil’s Northeastern marketing assets in 1986 and Cumberland Farms and Gulf Oil merged into Cumberland Gulf Group in 2008. In 2015, Boston-based ArcLight Capital Partners acquired Gulf Oil and Cumberland Farms’ dealer business.
Neither EG Group nor Cumberland Farms disclosed the price tag on the transaction. OPIS expected that Cumberland Farms would fetch a price in the billions of dollars. Shriber estimated the transaction to be worth more than $3 billion.
The acquisition will benefit EG and have major repercussions for the c-store industry, he said. “For EG, they are getting a well-positioned, recognized chain of large box convenience stores with gas, in strong markets. That provides EG with an immediate platform to implement their branded quick-service restaurant food options,” Shriber said. “For the industry, it has impact as EG is a very new entrant to the U.S. market. And, with a fairly immediate top 5 ranking, they are a competitive threat, not only to the big players but more significantly to smaller, regional fuel distribution and convenience companies.”
Mohsin Issa, founder and co-CEO of EG Group, said “the acquisition of Cumberland Farms is a transformative one for our 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,” he said. “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.”
Zuber Issa, founder and co-CEO of EG Group, said, “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. We look forward to welcoming the talented team at Cumberland Farms into the EG family.”
EG Group will retain the well-known Cumberland Farms brand on all of the acquired stores and is considering the addition of Cumberland Farms products to EG’s portfolio.
“Whilst we believe EG can add a lot to the Cumberland Farms business, we also recognize that EG has much to learn from it,” Mohsin Issa said.
The purchase of Cumberland Farms will take the EG Group’s network to a total of nearly 1,700 U.S. stores, operating in 30 states and retailing more than 2.5 billion gallons of fuel with merchandise sales of more than $3 billion on an annualized basis.
It is the latest acquisition in a growing string of deals. The momentum began in early 2018 when the EG Group acquired The Kroger Corp.’s 762-site c-store network and instantly became a top player in U.S. convenience retailing. Then in late 2018, it acquired 225 Minit Mart c-stores from TravelCenters of America LLC, Westlake, Ohio. In 2019, along with the Cumberland Farms deal, it has signed agreements to acquire 54 c-stores from Fastrac Markets LLC, East Syracuse, N.Y., and 69 c-stores from Certified Oil, Columbus, Ohio.
Founded in 2001 by the Issa family, Blackburn, U.K.-based EG Group is a gasoline forecourt retail convenience operator that has established partnerships with global brands. It has approximately 5,200 sites across Europe, the United States and Australia.