EG Group, the forecourt retailer and fast-food operator, has acquired Leon Restaurants in a deal reported to be worth up to £100m.
Founded by John Vincent, Henry Dimbleby and Allegra McEvedy in 2004, the healthy fast food concept has 70 restaurants, including 42 company-owned and 29 franchised across the UK and Europe.
The acquisition of Leon sees EG Group further strengthen its penetration into non-fuel and foodservice operations.
The group, led by the Issa brothers, operates more than 700 foodservice outlets in the UK & Ireland of which 310 operate from standalone premises.
EG Group operates sites for a number of third-party brands, including Starbucks, KFC, Burger King, Greggs, Sbarro, Cinnabon and Subway.
The company plans to invest in Leon and open around 20 Leon sites per year from 2022, while develop its non-restaurant products across its convenience retail proposition.
EG Group, which is backed by Stonegate owner TDR Capital, owns Asda supermarket, and was involved in an unsolicited bid for Caffe Nero.
The highly leveraged business has a reported £7.8m debt pile. The Mail on Sunday said the deal was worth between £80m-£100m. Leon was backed by Active Partners while Vincent was the single biggest shareholder.
In December 2020, Leon approved a CVA and restructuring plan, which protected all sites and jobs. In February, John Vincent warned that Leon was burning through £200,000 a week during lockdown. Its heavily London and travel hub-concentrated sites have been severely impacted by the pandemic.
Mohsin Issa CBE and Zuber Issa CBE, co-founders and co-CEOs, EG Group, said: “Leon is a fantastic brand that we have long admired. As established entrepreneurs in the foodservice retail market ourselves, we have a huge admiration for the business that John and the Leon team have built over the years, and firmly believe that their culture and values closely align with our own.”
The Issas said the acquisition presents an opportunity to develop the menu offer, the various concession formats including drive thrus, and build on the existing network by exploring opportunities across its own estate.
They said the equity investment “aligns with our commitment to being a committed foodservice operator globally, delivers financial benefit to our underlying business, and supports broader commercial strategies to be able to better realise further growth opportunities.”
John Vincent, CEO of LEON will leave the brand as part of the deal.
He said: “In some ways this is a sad day for me, to part company with the business I founded 17 years ago in Carnaby Street. But I have had the pleasure of getting to know Mohsin and Zuber across the last few years. They have been enthusiastic customers of Leon, going out of their way to eat here whenever they visit London. They are decent, hard-working business people who are committed to sustaining and further strengthening the values and culture that we have built at Leon, a business that has my dad’s name above the door.”
He said the Issas would be “superb custodians” of Leon, with the “vision, investment appetite, foodservice expertise and network scale” to grow the brand.
“This is what Leon has always been built for and I am confident under the new ownership, the brand will flourish and have even greater appeal to a broader customer base, especially outside of London,” he said.