6:05 am - February 23, 2025
The private equity firm Clayton, Dubilier & Rice (CD&R) is considering the sale of a minority stake in Motor Fuel Group (MFG), the UK’s largest independent petrol forecourt operator, in a deal that could value the company at approximately £7 billion. MFG, which operates over 1,200 sites across Britain under brands such as Esso and Shell, has been transformed since CD&R acquired it in 2015. Initially managing just 360 sites, MFG has expanded significantly under CD&R’s ownership, solidifying its position as a major player in the UK fuel retail sector. The firm is now exploring options to sell a 25-30% stake, with the process expected to unfold over the coming months and a potential deal closing later this year. CD&R has reportedly ruled out the use of a continuation vehicle, a common private equity transaction structure, and plans to retain a controlling stake in MFG after any sale.
MFG’s growth under CD&R’s ownership has been nothing short of remarkable. In addition to its petrol forecourt operations, the company has expanded its offerings to include high-margin foodservice and electric vehicle (EV) charging. MFG has installed hundreds of EV charging points across its network and aims to become a leader in the ultra-fast charging sector, with plans to invest £400 million in EV infrastructure. The company currently operates nearly 1,000 ultra-rapid chargers, capable of delivering 100 miles of range in just 10 minutes, and has set a target of reaching 3,000 chargers by 2030. This strategic focus on EV charging aligns with the UK’s broader energy transition goals and positions MFG as a key player in the shift toward cleaner transportation. The company’s profitability has also grown significantly, with expected pro forma EBITDA of £700 million for the current financial year, up 14 times since CD&R’s initial investment.
CD&R’s decision to explore a minority stake sale is part of a broader strategy to generate liquidity while maintaining control of MFG. The private equity firm has already received hundreds of millions of pounds in dividends from MFG, reflecting the company’s strong financial performance. A sale of a 25% stake at a £7 billion valuation would provide CD&R with additional liquidity, while also setting the stage for a potential initial public offering (IPO) on the London Stock Exchange in the coming years. Bankers involved in the process believe that a minority sale this year could be followed by an IPO within two years, as MFG continues to strengthen its position in the market. This dual-track approach is common in private equity, allowing firms to capitalize on strong valuations while keeping the door open for a future listing.
MFG’s expansion has also been bolstered by its relationship with Morrisons, the UK supermarket chain acquired by CD&R in a £2.5 billion deal last year. The private equity firm merged MFG’s forecourt operations with those of Morrisons, creating a combined entity with significant scale and resources. Morrisons currently holds a 20% stake in MFG, further deepening the ties between the two companies. This partnership has enabled MFG to leverage Morrisons’ brand and infrastructure, enhancing its foodservice offerings and strengthening its competitive position in the market. The integration of Morrisons’ forecourt operations has also contributed to MFG’s rapid growth, as the company continues to expand its network of petrol stations and convenience stores.
The potential sale of a minority stake in MFG highlights the growing interest in the UK fuel retail sector, particularly as companies like MFG invest heavily in EV charging and other future-proof technologies. The deal is expected to attract significant attention from investors, given MFG’s strong financial performance and strategic position in the energy transition. CD&R’s decision to sell a minority stake also reflects the firm’s long-term commitment to MFG, as it seeks to balance liquidity with continued growth and investment. With its focus on EV charging, foodservice, and convenience retail, MFG is well-positioned to thrive in a rapidly evolving market, making it an attractive target for investors.
Looking ahead, MFG’s future appears bright, with plans to continue expanding its EV charging network and increasing its presence in the UK fuel retail market. The potential IPO on the London Stock Exchange could provide further validation of the company’s success and offer a clear exit strategy for CD&R and its investors. For now, the sale of a minority stake represents an important milestone in MFG’s journey, as it continues to navigate the challenges and opportunities of the energy transition. With its strong track record of growth and innovation, MFG is set to remain a key player in the UK’s evolving fuel and convenience retail landscape.