GPM Investments, owned by Arko Holdings Ltd., is purchasing up to 175 filling stations, c-stores and tobacco stores in the Midwest, according to a report by Globes.
The deal is reportedly happening in two stages. In stage one of the agreement, GPM is buying 125 sites for filling stations and convenience stores at a cost of $27-29 million, subject to adjustments. In stage two, GPM has an option to buy the remaining sites at an undisclosed price, which is slated to be set within 45 days of the first stage being completed.
If the agreement is carried out as planned, GPM will grow its footprint to 950 filling stations in 16 U.S. states located on the East Coast, in the Southeast and in the Midwest.
CSD caught up with Steven Montgomery, president of b2b Solutions based in Lake Forest, Ill., for his insights on who GPM may be purchasing stores from.
He noted with GPM’s expansion into the Midwest with former purchases of VPS Group and Road Ranger, “GPM is now covering a great deal of geography. It is logical from an operational and marketing perspective for them to add more stores in the Midwestern region.”
He suggested two potential strategies:
“There aren’t a lot of chains in the Midwest with 175 stores that are likely candidates for an acquisition. so it appears it could be a company that has two facets, such as a company-run facet and also a dealer operation. GPM could be purchasing the company run stores first and the dealer stores second (or vice-versa),” he suggested.
“Or it’s a larger chain with a smaller chain, and GPM simply said it’s not not buying the smaller chain unless it has a bigger chain to anchor it. Which might mean my definition of the Midwest is too narrow. Buying an anchor chain and then planning to immediately build around it is a logical strategy.”
GPM is currently one of the largest privately-owned companies in the convenience store business, operating more than 500 company stores, as well as more than 100 dealer locations. The company, based in Richmond, Va., operates or supplies stores in Virginia, Connecticut, Delaware, Maryland, Pennsylvania, North Carolina, South Carolina, Rhode Island, New Jersey, Tennessee, Illinois, Indiana and Kentucky.
GPM operates 163 Fas Mart and 58 Shore Stop convenience store locations. In August 2013, GPM acquired 264-store VPS Group, which included the brand names of Scotchman, Young’s, Li’l Cricket, Everyday Shop, BreadBox and Cigarette City—now operated under a division of the company called GPM Southeast. In early 2015, GPM began operating eight One Stop Stores in North and South Carolina, which were previously owned by Arey Oil. GPM has also expanded into the Midwest after taking ownership of 42 Road Ranger convenience stores.