Clayton, Dubilier & Rice-Backed Motor Fuel Group has announced the acquisition of MRH, the UK’s largest petrol station and convenience retail operator. The transaction will create the UK’s #1 operator by number of sites and #2 by fuel volume. MFG is owned by funds managed by Clayton, Dubilier & Rice. The transaction is valued at approximately £1.2 billion.
MFG and MRH together will operate more than 900 sites, which are predominantly company-owned and franchisee-operated and manage third-party fuel, convenience, and foodservice brands. These include fuel brands BP, Esso, Jet, Murco, Shell and Texaco and retailbrands Budgens, Costa Coffee, Greggs, Spar and Subway, as well as the MRH-owned brand, Hursts. On a combined basis, MFG and MRH sold approximately 3.6 billion litres of fuel in 2017.
Alasdair Locke, chairman of MFG, will remain chairman of the combined business. Sir Terry Leahy, a senior advisor to CD&R’s funds and former chief executive of Tesco, will continue to serve on the board of directors and chair the executive committee of the Board.
“Both MFG and MRH operate in a stable market and are highly focused on convenience with a track record of consistent growth and commitment to operational excellence,” said CD&R partner Marco Herbst. “As petrol forecourts transition to customer-focused convenience and food-to-go hubs for local communities, this platform is distinctly positioned to meet this growing demand across the U.K.”
“This is a transformational milestone for both companies that we believe will make us an even stronger partner for fuel brands and retail customers seeking convenient foodservice options,” said Locke. “We are excited to welcome the MRH team, who share a commitment to growth and innovation, as we work together to consolidate a highly- fragmented market and continue our expansion of retail offerings across the combined estate.”
CD&R partner David Novak commented: “These characteristics align with our retail investment strategy and make this a compelling platform with exciting prospects for continued success. It is another example of our European strategy to back strong management teams to build market-leading companies serving high growth markets.”
The transaction is expected to close in the second quarter of 2018, subject to customary regulatory approvals.