Under the deal, Motor Fuel Group (MFG) has been bought by Clayton, Dubilier & Rice (CD&R) from fellow private equity firm Patron Capital, which has seen a significant return on its investment in the business.
Patron held around 90 per cent of the company, which operates 373 UK sites including 18 across Scotland, with Banffshire-based Locke holding just under 10 per cent and other senior managers owning the balance. It is understood the management team, who will have seen the value of their stakes in the business rise significantly, are re-investing in the company under the new owner.
Locke, who became one of Scotland’s richest men when he sold oil and gas services business Abbot seven years ago, netting more than £100m, will remain as the firm’s chairman, while former Tesco boss Sir Terry Leahy – a senior adviser to CD&R – will join its board.
MFG was bought by Patron in 2011 and since then has grown its number of forecourt sites from 48 through a series of acquisitions.
It is not known how much Locke invested in the business initially for his stake and Patron did not comment on what level of profit it had generated on its investment, although the private equity firm did say the sale represented a “very strong return”.
MFG’s sites operate under the BP, Shell, Texaco and Jet brands and have retail partnerships with Costcutter and Costa Coffee. The company generated more than £1 billion sales in 2014,
Patron senior partner Stephen Green said: “Together with the management team and Alasdair Locke, we have succeeded in taking a complex property-backed business, driving operational efficiencies and rapidly transforming the company into a stable, profitable operating platform with potential for future growth.
“The success of MFG – one of our largest investments to date and a highly profitable one – highlights the strength of our strategy of investing opportunistically in property-backed investments across western Europe.”
Locke said that CD&R’s “reputation for operational excellence and deep consumer and retail experience will be especially useful as we move [MFG] forward to the next stage of profitable growth”.
The company has grown rapidly through a string of acquisitions and in April had acquired 90 petrol filling stations from Royal Dutch Shell for an undisclosed sum. More than half – 53 per cent – of the 90 sites are in the south-east of England, including 21 sites in London.
In September last year, its biggest acquisition deal saw the firm acquire 228 forecourt sites from Murco.
Marco Herbst, a partner at CD&R, said he looked forward to building on the success of the business to date and “continuing to accelerate the company’s transformation into a best-in-class petrol and convenience retailer”.
CD&R was advised by Clifford Chance, Debevoise & Plimpton, EY and OC&C. Patron was advised by Travers Smith and MFG was advised by Pinsent Masons. The deal is expected to complete in July.
Locke founded Abbot in 1992 and floated it in London three years later. He was executive chairman when US private equity firm First Reserve bought Abbot in a deal that valued the group at £906m. In 2010, Abbot – by then renamed as KCA Deutag – changed hands again, with control passing to Pamplona Capital Management.