Haymaker Acquisition Corp. II (NASDAQ: HYAC) (“Haymaker”), a
publicly traded special purpose acquisition company, ARKO Holdings
Ltd. (“Arko”), an Israeli public holding company (TASE: ARKO) whose
primary asset is a controlling stake in GPM, and GPM Investments,
LLC (“GPM” or the “Company”), announced today that they, and
certain other related parties, have entered into definitive
agreements for a business combination, pending shareholder
approval. The transaction is expected to close in the fourth
quarter of 2020 and upon closing, the combined company is expected
to be listed on the Nasdaq Stock Market under the ticker symbol
ARKO.
GPM, the seventh largest convenience store chain in the United
States, has grown its store count from 320 stores in 2011 to 1,393
locations as of June 30, 2020 in 23 states comprised of 1,266
company-operated stores and 127 additional sites to which it
supplies fuel. The Company operates in three segments: retail,
which consists of fuel and merchandise sales to retail consumers;
wholesale, which supplies fuel to third-party dealers and
consignment agents; and GPM Petroleum, which supplies fuel to
Company stores as well as subwholesalers and bulk purchasers.
Given substantial rollover from existing equityholders, upon
completion of the transaction, pro-forma leverage, defined as Net
Debt to 2020E Pro Forma Adjusted EBITDA, is expected to be
approximately 1.7x. It is anticipated that the combined company
will have an equity market capitalization at closing of
approximately $1.4 billion. Anticipated total enterprise value,
pro-forma for the pending acquisition of Empire Petroleum which GPM
anticipates closing in the beginning of the fourth quarter of 2020,
is expected to be approximately $2.0 billion, or ~9x GPM’s 2021E
Pro Forma Adjusted EBITDA.
Arie Kotler, Chief Executive Officer of Arko and
GPM, commented: “We are excited to reach a larger global audience
through the pending business combination with Haymaker and
subsequent listing on the Nasdaq Stock Market. We have an
established platform for identifying and integrating successful
acquisitions in the growing, fragmented and historically recession
resilient convenience store industry as well as attractive organic
sales and profitability drivers. This transaction provides us with
increased liquidity and access to the broader capital markets,
enabling us to continue to execute on our proven growth strategy as
we expand our network of convenience stores across the United
States.”
Steven Heyer, CEO and Executive Chairman of Haymaker, commented:
“Arko and GPM are the ideal partners for Haymaker. Their business
has all of the key attributes we were seeking and we are very
pleased to announce the definitive agreement for this combination.
We believe Arko and GPM, with their established platform for
growth, talented and driven management team, and demonstrated
success operating in an attractive end market, will drive value for
all stakeholders. Given the current environment, the Company’s
resilient business model is particularly relevant, the inherent
growth drivers extremely compelling, and their disciplined
execution commendable. We are excited to continue to work with Arie
and his team as we broaden the shareholder base globally at the
newly combined Company and build on their successful track record
of growth.”
* Adjusted EBITDA is calculated as EBITDA further adjusted by
excluding the gain or loss on disposal of assets, impairment
charges, acquisition costs, other non-cash items, and other unusual
or non-recurring charges. Pro forma Adjusted EBITDA gives effect to
acquisitions and synergies for the entire period presented
irrespective of the actual timing of acquisitions or commencement
of synergies during the period.
Highlights of the proposed transaction:
- The Company has grown through
acquisitions to become the 7th largest convenience store chain in
the United States, with 1,266 company-operated locations (excluding
pending acquisitions) and 127 dealer sites to which it supplies
fuel, in 23 states. The Company has increased its store count
approximately 4.4x over the past seven years.
- The Company projects its Adjusted
EBITDA will have grown at a 28%-29% compound annual growth rate
(“CAGR”) from 2016 through 2020E.
- The convenience store industry has
demonstrated long-term growth and remains highly fragmented. The
industry has grown at a 3.4% CAGR since 2007**. The top ten
companies control less than 20% of the store base in the United
States, providing significant opportunities for future growth.
- The Company’s growth has accelerated
in more recent months during the COVID-19 pandemic as consumers
shift shopping patterns to convenience stores from other
channels.
- The combined company will be led by
GPM’s current management team, which has significant industry and
public market experience, including Arko’s and GPM's Chief
Executive Officer, Arie Kotler. Arko and GPM will also benefit from
Haymaker’s investing and operational experience at Fortune 500
companies, particularly in the consumer and hospitality
sectors.
** NACS State of the Industry Report
Raymond James & Associates, Inc. is serving as lead
financial and capital markets advisor. Nomura Securities
International, Inc., Stifel, Nicolaus & Company, Incorporated,
BMO Capital Markets Corp., and Citigroup Global Markets Inc. are
serving as financial advisors and capital markets advisors to
Haymaker. Cantor Fitzgerald & Co. is serving as capital markets
advisor to Haymaker and Morgan Stanley & Co. LLC is serving as
financial and capital markets advisor to Arko. DLA Piper LLP (US),
Gornitzky & Co., and Ellenoff Grossman & Schole LLP are
serving as legal advisors to Haymaker. Greenberg Traurig, LLP and
S. Friedman & Co. are acting as legal advisors to Arko.
Investor Conference Call Information: Arko,
GPM, and Haymaker will host a joint investor conference call to
discuss the proposed transaction Wednesday, September 9, 2020 at
9:00 AM ET. Interested parties may listen to the prepared remarks
via telephone by dialing 1 (877) 407-3982 in the United States, 1
(809) 406 247 in Israel, or 1 (201) 493-6780 in other countries.
Please reference Conference ID 13708312 when prompted.
The conference call webcast, a related investor
presentation with more detailed information regarding the proposed
transaction and a transcript of the investor call will be available
at www.haymakeracquisition.com. The investor presentation will also
be furnished today to the Securities and Exchange Commission (the
“SEC”), which can be viewed at the SEC’s website at
www.sec.gov.
Additional Information Posted to Website
Haymaker posted information regarding the
proposed transaction, which is available at
www.haymakeracquisition.com. The investor presentation will also be
furnished today by Haymaker to the SEC on a current report on Form
8-K, which can be viewed at the SEC’s website at www.sec.gov.
About GPM and Arko: Based in Richmond, VA, GPM
was founded in 2003 with 169 stores and has grown through
acquisitions to become the 7th largest convenience store chain in
the United States, with 1,393 locations comprised of 1,266
company-operated stores and 127 dealer sites to which it supplies
fuel, in 23 states. GPM operates in three segments: retail, which
consists of fuel and merchandise sales to retail consumers;
wholesale, which supplies fuel to third-party dealers and
consignment agents; and GPM Petroleum, which supplies fuel to GPM
stores as well as a small number of independent operators and bulk
purchasers.
Arko is the controlling shareholder of GPM (owns ~68%) and, as
part of the proposed transaction, the shares of Arko will be
de-listed from Tel-Aviv stock exchange. At the closing of the
proposed transaction with Haymaker, Arko will have no material
independent operating activities, income, or net assets, other than
its ownership interest in GPM.
About Haymaker: Haymaker is a $400 million
blank check company formed for the purpose of entering into a
merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses. The Company’s acquisition and value creation strategy
is to identify, acquire and, after its initial business
combination, build a company in the consumer, retail, media, or
hospitality industries. The Company is led by Chief Executive
Officer and Executive Chairman Steven J. Heyer, President Andrew R.
Heyer, Chief Financial Officer Christopher Bradley, and Senior Vice
President Joseph Tonnos. For more information about Haymaker,
please visit www.haymakeracquisition.com.
Additional Information and Where to Find ItARKO
Corp. intends to file a registration statement on Form S-4, which
will include a prospectus with respect to ARKO Corp.’s securities
to be issued in connection with the proposed transaction and a
proxy statement with respect to Haymaker’s stockholder meeting to
vote on the transaction (the “Haymaker proxy
statement/prospectus”), with the SEC. In addition, Arko will
prepare a proxy statement (the “Arko proxy”), which will include
the Haymaker proxy statement/prospectus as an exhibit thereto, to
be filed with the Israel Securities Authority (the “ISA”).
ARKO Corp., Haymaker, GPM and Arko urge investors and other
interested persons to read, when available, the Haymaker proxy
statement/prospectus and the Arko proxy, as well as other documents
filed with the SEC and the ISA, because these documents will
contain important information about the proposed
transaction. When available, the Haymaker proxy
statement/prospectus and other relevant materials for the proposed
transaction will be mailed to stockholders of Haymaker as of a
record date to be established for voting on the proposed
transaction. The Haymaker proxy statement statement/prospectus,
once available, can be obtained, without charge, at the SEC’s web
site (http://www.sec.gov).
Participants in the SolicitationARKO Corp.,
Haymaker, Arko, GPM and their respective directors, executive
officers and other members of their management and employees, under
SEC rules, may be deemed to be participants in the solicitation of
proxies of Haymaker stockholders in connection with the proposed
transaction. Investors and securityholders may obtain more detailed
information regarding the names, affiliations and interests of
Haymaker’s directors and officers in its Annual Report on Form 10-K
for the fiscal year ended December 31, 2019, which was filed with
the SEC on March 19, 2020 and is available free of charge at the
SEC’s web site at www.sec.gov. Information regarding the persons
who may, under SEC rules, be deemed participants in the
solicitation of proxies to Haymaker’s stockholders in connection
with the proposed transaction will be set forth in the proxy
statement/prospectus for the proposed transaction when
available.
Forward-Looking Statements:This press release
includes “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. The expectations, estimates, and projections of
the businesses of ARKO Corp., Haymaker, Arko and GPM may differ
from their actual results and consequently, you should not rely on
these forward looking statements as predictions of future events.
Words such as “expect,” “estimate,” “project,” “budget,”
“forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,”
“should,” “believes,” “predicts,” “potential,” “continue,” and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, expectations with respect to future performance
including projected financial information (which is not audited or
reviewed by auditors) and anticipated financial impacts of the
proposed transaction, the satisfaction of the closing conditions to
the proposed transaction, and the timing of the completion of the
proposed transaction. These forward-looking statements involve
significant risks and uncertainties that could cause the actual
results to differ materially from the expected results. Most of
these factors are outside of the control of ARKO Corp., Haymaker,
Arko and GPM, and are difficult to predict. Factors that may cause
such differences include, but are not limited to: (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the definitive agreements with
respect to the proposed transaction, (2) the outcome of any legal
proceedings that may be instituted against the parties following
the announcement of the proposed transaction and any definitive
agreements with respect thereto; (3) the inability to complete the
proposed transaction, including due to failure to obtain approval
of the stockholders of Haymaker and Arko or other conditions to
closing; (4) the impact of the COVID-19 pandemic on (x) the
parties’ ability to consummate the proposed transaction and (y) the
business of GPM and the combined company; (5) the receipt of an
unsolicited offer from another party for an alternative business
transaction that could interfere with the proposed transaction; (6)
the inability to obtain or maintain the listing of the combined
company’s common stock on Nasdaq following the proposed
transaction; (7) the risk that the proposed transaction disrupts
current plans and operations as a result of the announcement and
consummation of the proposed transaction; (8) the ability to
recognize the anticipated benefits of the proposed transaction,
which may be affected by, among other things, competition, the
ability of the combined company to grow and manage growth
profitably and retain its key employees; (9) costs related to the
proposed transaction; (10) changes in applicable laws or
regulations; (11) the demand for GPM’s and the combined company’s
services together with the possibility that GPM or the combined
company may be adversely affected by other economic, business,
and/or competitive factors; (12) the failure of GPM to consummate
its acquisition from Empire Petroleum Partners, LLC; (13) the
number of shares submitted for redemption by Haymaker’s
stockholders in connection with the stockholder meeting to approve
the proposed transaction; (14) risks and uncertainties related to
GPM’s business, including, but not limited to, changes in petroleum
prices, the impact of competition, environmental risks,
restrictions on the sale of alcohol, cigarettes and other smoking
products and increases in their prices, dependency on suppliers,
increases in fuel efficiency and demand for alternative fuels for
electric vehicles, failure by independent outsider operators to
meet their obligations, acquisition and integration risks, and
currency exchange and interest rates risks; and (15) other risks
and uncertainties included in (x) the “Risk Factors” section of the
Haymaker proxy statement/prospectus, when available, and (y) other
documents filed or to be filed with the SEC by Haymaker and the ISA
by Arko. The foregoing list of factors is not exclusive. You should
not place undue reliance upon any forward-looking statements, which
speak only as of the date made. ARKO Corp., Haymaker, Arko, and GPM
do not undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in their expectations or any change in
events, conditions, or circumstances on which any such statement is
based.
No Offer or SolicitationThis press release
shall not constitute a solicitation of a proxy, consent, or
authorization with respect to any securities or in respect of the
proposed transaction. This press release shall also not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any states
or jurisdictions in which such offer, solicitation, or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Non-GAAP Financial MetricsThis press release
includes non-GAAP financial measures for the Company which do not
conform to SEC Regulation S-X in that it includes financial
information (such as Adjusted EBITDA and Pro Forma Adjusted EBITDA)
not derived in accordance with U.S. generally accepted accounting
principles (“GAAP”). Accordingly, such information and data will be
adjusted and presented differently in the Haymaker proxy
statement/prospectus. The Company believes that the presentation of
non-GAAP measures provides information that is useful to investors
as it indicates more clearly the ability of the Company to meet
capital expenditure and working capital requirements and provides
an additional tool for investors to use in evaluating ongoing
operating results and trends. Other companies may calculate
Adjusted EBITDA, Pro Forma Adjusted EBITDA, and other non-GAAP
measures differently, and therefore the Company’s Adjusted EBITDA,
Pro Forma Adjusted EBITDA, and other non-GAAP measures may not be
directly comparable to similarly titled measures of other
companies. Investors should review the Company’s audited and
interim financial statements, which will be presented in the
Haymaker proxy statement/prospectus, and not rely on any single
financial measure to evaluate their respective businesses.
Investor ContactFarah Soi, CFACaitlin
Churchill(203) 682-8200HaymakerII@icrinc.com
Media ContactKeil Decker(646)
277-1200HaymakerII@icrinc.com
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