ARKO Corp. (Nasdaq: ARKO) (“ARKO” or the “Company”), a Fortune 500
company and one of the largest convenience store operators in the
United States, announced today that ARKO has completed its
previously announced acquisition (the “WTG Acquisition”) of the
retail and fleet fueling assets (the “WTG Business”) of WTG Fuels
Holdings, LLC (“WTG”), the owner of Uncle’s Convenience Stores and
GASCARD fleet fueling operations. This transaction marks the 24th
acquisition for ARKO since 2013, and the second completed
acquisition in the first six months of 2023.
“The WTG Acquisition fits squarely in our long-term growth
strategy and our commitment to create value for our stockholders,”
said Arie Kotler, Chairman, President, and Chief Executive Officer
of ARKO. “We believe we will add significant value to
the WTG Business by leveraging our excellent integration
capabilities, and we believe that the WTG Business will benefit
considerably from our merchandizing and marketing initiatives. We
expect that the WTG Business’ robust diesel business will advance
our fuel strategy to maximize fuel gross profit dollars. We believe
that Uncle’s and GASCARD are well-positioned to benefit from the
scale and expertise at the heart of ARKO’s operations, and we
welcome them to our Family of Community Brands.”
Founded in 1976, WTG is a leading Texas convenience store
operator, with 24 company-operated Uncle’s Convenience Stores
across western Texas. This acquisition enhances ARKO’s footprint in
attractive markets and will bring the fas REWARDS® loyalty program
and favorable assortment to a broader group of consumers. Uncle’s
stores are popular West Texas destinations that anchor their
markets with convenient grocery, beer, and fresh food options. The
WTG Business is known for its high-quality food, including Uncle’s
branded fresh food, Hunt Brothers® Pizza and Champs Chicken.
Certain stores also have walk-in beer caves, and Uncle’s has
historically had very strong diesel sales, which accounts for over
33% of its overall fuel volume.
As part of the transaction, the Company has also acquired 68
proprietary GASCARD-branded fleet fueling cardlock sites and 43
private cardlock sites, one of the largest fleet fueling operations
in West Texas. Nearly 75% of fuel sales by volume at the cardlock
locations have been diesel. In addition, the WTG Business issues
fuel cards that provide customers with access to a nationwide
network of fueling sites. ARKO’s fleet fueling segment expects to
leverage its leading marketing and operations knowledge to manage
fleet fueling sites and create value for customers. The WTG
Acquisition also includes three land parcels and nine independent
dealer locations.
The total purchase price for the WTG Acquisition was
approximately $140.2 million plus the value of inventory at
closing. ARKO financed from its own sources approximately $25.2
million of the cash consideration plus the value of inventory and
other closing adjustments. The remaining approximately $115 million
was funded by funds managed by Oak Street, a Division of Blue Owl
Capital (“Oak Street”), as part of the existing agreement between
the Company and Oak Street, according to which Oak Street acquired
the majority of the real estate assets of the WTG Business
concurrently with the closing of the transaction, and the Company
now leases such real estate assets from Oak Street for $6.9 million
in annual cash payments. As previously reported, on May 2, 2023,
the Company amended its existing agreement with Oak Street, and, in
addition to the funding for the WTG Acquisition, such agreement
currently provides for an aggregate up to $1.5 billion of capacity
from the date the amendment was signed through September 30,
2024.
Using estimated forward-looking non-GAAP measures, the Company
expects that the WTG Acquisition will add approximately $14.9
million of adjusted EBITDA on an annualized basis after expected
synergies.i
About ARKO Corp.
ARKO Corp. (Nasdaq: ARKO) is a Fortune 500 company that owns
100% of GPM Investments, LLC and is one of the largest operators of
convenience stores and wholesalers of fuel in the United States.
Based in Richmond, VA, our highly recognizable family of community
brands offers delicious, prepared foods, beer, snacks, candy, hot
and cold beverages, and multiple popular quick serve restaurant
brands. Our high value fas REWARDS® loyalty program offers
exclusive savings on merchandise and gas. We operate in four
reportable segments: retail, which includes convenience stores
selling merchandise and fuel products to retail customers;
wholesale, which supplies fuel to independent dealers and
consignment agents; GPM Petroleum, which sells and supplies fuel to
our retail and wholesale sites and charges a fixed fee, primarily
to our fleet fueling sites; and fleet fueling, which includes the
operation of proprietary and third-party cardlock locations, and
issuance of proprietary fuel cards that provide customers access to
a nationwide network of fueling sites. To learn more about GPM
stores, visit: www.gpminvestments.com. To learn more about ARKO,
visit: www.arkocorp.com.
Forward-Looking Statements
This document includes certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements may address, among other
things, the Company’s expected financial and operational results
and the related assumptions underlying its expected results, as
well as the expected financial and other results of operations of
the WTG Acquisition. These forward-looking statements are
distinguished by use of words such as “anticipate,” “aim,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “will,” “would” and the negative of these
terms, and similar references to future periods. These statements
are based on management’s current expectations and are subject to
uncertainty and changes in circumstances. Actual results may differ
materially from these expectations due to, among other things,
changes in economic, business and market conditions; the Company’s
ability to maintain the listing of its common stock and warrants on
the Nasdaq Stock Market; changes in its strategy, future
operations, financial position, estimated revenues and losses,
projected costs, prospects and plans; expansion plans and
opportunities; changes in the markets in which it competes; changes
in applicable laws or regulations, including those relating to
environmental matters; market conditions and global and economic
factors beyond its control; and the outcome of any known or unknown
litigation and regulatory proceedings. Detailed information about
these factors and additional important factors can be found in the
documents that the Company files with the Securities and Exchange
Commission, such as Form 10-K, Form 10-Q and Form 8-K.
Forward-looking statements speak only as of the date the statements
were made. The Company does not undertake an obligation to update
forward-looking information, except to the extent required by
applicable law.
Use of Non-GAAP Measures
We define EBITDA as net income (loss) before net interest
expense, income taxes, depreciation and amortization. Adjusted
EBITDA further adjusts EBITDA 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. Each of
EBITDA and Adjusted EBITDA is a non-GAAP financial measure.
EBITDA and Adjusted EBITDA are not recognized terms under GAAP
and should not be considered as a substitute for net income (loss)
or any other financial measure presented in accordance with GAAP.
These measures have limitations as analytical tools and should not
be considered in isolation or as substitutes for analysis of our
results as reported under GAAP. We strongly encourage investors to
review our financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure.
Because non-GAAP financial measures are not standardized, EBITDA
and Adjusted EBITDA, as defined by us, may not be comparable to
similarly titled measures reported by other companies. It therefore
may not be possible to compare our use of these non-GAAP financial
measures with those used by other companies.
Media ContactAndrew PetroMatter on behalf of
ARKO(978) 518-4531apetro@matternow.com
Investor ContactRoss ParmanARKO
Corp.investors@gpminvestments.com
_____________________________i At this time, ARKO is unable to
provide a quantitative reconciliation of estimated forward-looking
non-GAAP performance measures without unreasonable efforts due to
the carve-out nature of this acquisition.
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