ARKO Corp. announced that GPM, a subsidiary of ARKO, has entered into an agreement with Quarles Petroleum Inc. for the acquisition of certain assets. These assets include 121 branded and 64 contracted cardlock sites, which are strategically located unmanned fuel sites located on high-traffic corridors in the mid-Atlantic region, at which customers purchase fuel with fleet cards.
Quarles is a fleet fueling cardlock operator located on the East Coast, with operations in Virginia, North Carolina, Maryland, Pennsylvania and Washington, D.C. Quarles services a diverse base of commercial customers across multiple industries, meeting their fueling needs at easily accessible commercial sites.
“We believe that this high-volume, 24/7/365 business in prime locations cannot be replicated today and will drive strategic growth,” said Arie Kotler, president and CEO of ARKO. “The acquisition of these assets complements and expands our core wholesale strategy, adding a mature fleet fueling platform and boosting our supply and distribution capabilities within our 33 states and Washington, D.C. fuel supply footprint.”
This acquisition is part of ARKO’s strategic focus on growth and generating long-term shareholder value with its dual convenience and wholesale platform. At the time of signing an asset purchase agreement, using estimated forward-looking non-GAAP measures, the company expects that this acquisition will add approximately $17.3 million of adjusted EBITDA on an annualized basis after incremental rent of approximately $7.7 million to be paid to Oak Street Real Estate Capital, the private equity real estate firm who will fund approximately $130 million of the purchase price. The acquisition will add approximately 200 million gallons to the approximately 2 billion gallons ARKO currently sells annually.
“Quarles has focused on building a commercial fleet fueling business with expanded site access, superior quality fuels and fleet card features that provide fleet operators with a comprehensive fueling solution,” said Paul Giambra, president and CEO of Quarles Petroleum. “Quarles and ARKO share a commitment to excellent service and providing the best possible solutions for our customers.”
The closing of the transaction is subject to fulfillment of conditions precedent and the completion of various transition planning matters. The transaction is expected to close during the second quarter of 2022.
On Nov. 9, 2021, ARKO completed its acquisition of 36 company-operated Handy Mart convenience stores and gas stations and one development parcel, located in North Carolina, which represents the company’s 20th acquisition since 2013.
Based in Richmond, Va., ARKO Corp. owns 100% of GPM Investments and its highly recognizable family of community brands offers prepared foods, beer, snacks, candy, hot and cold beverages and multiple popular quick serve restaurant brands. It operates in three reportable segments: retail, wholesale and GPM Petroleum.