In what has already been a hectic year for businesses in Forecourt Trader’s Top 50 Indies, another twist has just been added by HKS more than doubling in size to just under 60 sites in just three months.
The growth spurt began when HKS acquired seven sites from the sell-off of company owned sites by Shell, and last month they followed this with the acquisition of fellow Top 50 Indie Brobot.
In the most recent Forecourt Trader Top 50 Indies, published in March, Leicester-based HKS was ranked 10th with 27 sites; and Brobot, which is also based in Leicestershire, was 11th with 26 sites (including three investment sites).
Based on the March listing, HKS would rise to fifth. Following both deals, HKS expects annualised turnover to rise to £250m, compared with £100m last year, and its estate now stretches from Yorkshire to Surrey.
Brobot was founded by John Bootle in 1978 with a single site at Thorpe Road, Melton Mowbray, Leicestershire, and expanded through acquisitions over the years. John Bootle died in 1996, following which Brobot continued its growth under the chairmanship of his wife, Pat Bootle, and executive directors Bridget Smith and Eddie Bright.
Shane Thakrar, chief executive at HKS Holdings, commented: "On behalf of the entire company and the Thakrar family, we’re delighted at the addition of the new locations to the HKS group, which will help us to increase our offering to customers across the country.
"We’re delighted to have the continued support from HSBC, along with the great work KPMG and Eversheds have completed on our behalf during this transaction.
"We’d also like to extend our thanks to the Bootle family, as well as Eddie Bright and Bridget Smith from Brobot, for trusting us with the acquisition and taking these sites forward in the future.
"We look forward to welcoming the new members of our team on board to work alongside our existing committed team of individuals, who provide the strength behind our growth strategy."
He said they would be looking for opportunities to strengthen the convenience offer and food to go in the acquired sites. Subway stores have already been added to two of the sites that HKS bought from Shell.
Shane added that the company would be reviewing the branding of the company’s shop and fuel brands. HKS recently signed a deal with Spar while Brobot is predominantly Londis. Both have supply deals with BP and Jet, while HKS also has the recently acquired Shell sites. However Shane stressed that HKS would want to continue to work with Jet.
Eddie Bright said: "I would only like to comment on how much we’ve enjoyed being part of the industry and how the sale has given us the opportunity to head off in a new direction. The uniting of HKS and Brobot is a great fit that will make HKS a strong and dominant force in the Midlands, and we wish HKS every success as they grow in the future."
The deal was supported by Glen McLeod and Jason Mowe at HSBC, overseen by Antony Walsh’s legal team at Eversheds and with advice from Nick Taylor and Ian Borley at KPMG on behalf of HKS Holdings. Brobot Group was led by Patric Phelan with David Browne and Ben Rookes of Cooper Parry providing lead advisory, along with Martin Smith and Stephen McElhone of Spearing Waite providing legal advice.
Nick Taylor, director at KPMG, commented: "This deal demonstrates the success of independent operators within the petrol station sector and is an important acquisition within the East Midlands, given it brings together two successful regional businesses. This acquisition also provides yet further evidence of banks supporting businesses within the East Midlands to meet their strategic growth plans."
In addition, HKS and its bank HSBC were supported by Christie + Co’s national team of specialist retail valuers in both the acquisition of Brobot Petroleum and the Shell sites.
Christie + Co’s head of retail Steve Rodell said: "This is a fantastic acquisition by HKS that includes great sites and enhances their existing estate. I believe this is the first of many group deals likely in the current resurgent market.
"We look forward to working with HKS as they seek further opportunities to expand."
HKS had already had a busy year having recently signed deals with Spar to brand the majority of its forecourt shops, as well as Subway and Costa. In addition, HKS won two categories in the recent Forecourt Trader Awards, and was Business of the Year at the Midlands Asian Business Awards.
Doubling in size may make HKS the biggest grower in percentage terms in the Top 50 Indies this year, but the companies above it in the rankings have also piled on the sites as the independent sector has grown.
Euro Garages had 182 sites in March but has leap-frogged Rontec and closed the gap with second- placed MFG after adding 104 Esso sites and 68 Shell sites. MFG would have slipped to third place had it not added 90 sites from Shell to the 283 recorded in March.
MRH remains the clear leader having added 78 Esso sites to the 385 sites it had in March. The merger of Gerald Ronson’s two businesses in the summer did not affect the rankings, as Rontec and Snax 24 were already recorded as a single entity for the purposes of the Top 50. However, the sell-off of 15 sites to Asda and the acquisition of 19 sites from Esso gave it a net gain of four, meaning it slipped behind Euro Garages.
There is still time for further changes before the next Top 50 is compiled, but it is unlikely to come from further tranches of oil company sites being sold off. Esso has disposed of its entire estate and any disposals by BP and Shell are likely to be a trickle rather than a flood. If acquisitive companies want to make quick gains they may have to follow the example of HKS and find them within the Top 50.
Top 50 Indies listing - update
Forecourt Trader’s Top 50 Indies is published each March and the ink was barely dry this year before some of its biggest players clinched major deals for site acquisitions from the oil majors to give the sector an even greater sway in the market.
The ranking, which was first published in 1996, is based on the number of sites for each company and from the beginning the company that became MRH has held the top spot.
Based solely on the major deals that have been reported since March, the top 10 would be:
1. MRH463 sites
2. MFG385 sites
3. Euro Garages354 sites
4. Rontec214 sites
5. HKS57 sites
6. Applegreen UK54 sites
7. Park Garage Group 51 sites
8. Penny Petroleum30 sites
9. MPK Garages28 sites
10. Spring Petroleum27 sites
These numbers are likely to understate Applegreen UK, which has tended to grow under the radar with numerous deals for individual sites and small groups. The parent company raised £66.9m in a share issue in June, and UK expansion was one of the stated aims.
In addition, all the companies are likely to have seen some ’churn’ of individual sites during the year, so it will remain to be seen what the final figures are in March.
If you think your company might qualify for the Top 50 Indies email firstname.lastname@example.org and you will be sent a questionnaire at the start of January.