EG Group sells 415 USA East Coast stores for $1.5bn

EG America will continue to operate and trade the portfolio of assets sold under the Cumberland Farms, Fastrac, Tom Thumb and Sprint brands.

EG Group has announced it has agreed to the sale and leaseback on a portfolio of its sites on the east coast of the United States of America to Realty Income Corporation for a gross consideration of approximately $1.5bn.

This portfolio – which EG America will continue to operate and trade – comprises 415 store assets under the Cumberland Farms, Fastrac, Tom Thumb and Sprint banners. The transaction is expected to close in the second quarter of 2023, subject to customary closing conditions, and the Group will use net proceeds to repay debt.

The assets represent 15% of the Group’s total freehold property in 10 markets. Following completion, EG will pay an initial rent of $103m per annum with respect to these assets.

“Today’s announcement demonstrates the progress we continue to make to put in place a robust capital structure for the medium term that will underpin our long-term strategy and represents an important first step in this process,” said Zuber Issa, CBE co-founder and co-CEO of EG Group.

Realty Income is an S&P 500 company structured as a real estate investment trust. Its monthly dividends are supported by the cash flow from over 12,200 real estate properties primarily owned under long-term net lease agreements with commercial clients.

This transaction is in line with management’s commitment to reduce total net leverage through debt reduction and free cash flow generation, as communicated in EG Group’s Q3 trading update in November 2022.