ARKO Corp. announced that subsidiaries of ARKO have completed its previously announced acquisition, acquiring the assets of Transit Energy Group and its affiliates (TEG), which operates as of closing approximately 135 convenience stores, supplies fuel to approximately 190 independent dealers, and operates a transportation business with 58 trucks and 78 tanker trailers that supports the retail and wholesale business, all in the Southeastern U.S. This is ARKO’s 23rd Acquisition since 2013.
The acquisition also includes a network of approximately 190 independent dealer locations, expanding the company’s wholesale segment to over 1,850 sites. Including retail and wholesale, it is expected that the acquisition will add approximately 285 million gallons of diesel and gasoline, the majority branded, to the approximately two billion gallons the company currently sells annually.
This acquisition will grow ARKO’s retail store base into two new states.
TEG is one of the largest privately held portfolios in the Southeast, with well-known banners, including Corner Mart, Dixie Mart, Flash Market, Market Express and Rose Mart, stores that have family histories and long-term presence in its community. The retail segment is comprised of approximately 135 company-operated convenience stores located throughout South Carolina, North Carolina, Tennessee, Mississippi, Missouri, Louisiana, Alabama and Arkansas. Many of the stores include well-known food offerings.
“ARKO’s demonstrated history of growing adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and cash flow by executing the company’s long-term growth strategy, which is enhanced by our integration capacity and ability to add value to newly acquired stores with our merchandising and marketing, is what sets us apart as a convenience retailer,” said Arie Kotler, chairman, president and CEO of ARKO. “We believe we can add value to these stores and well-known regional brands with an enhanced offering as we reset these stores. We welcome TEG’s employees to our family of community brands and look forward to working together to grow the business and provide value for customers.”
Since 2013, ARKO’s systematic growth strategy has significantly increased the company’s cash flow and adjusted EBITDA, transforming the company from approximately 200 stores in seven states into one of the largest convenience store operators in the U.S., with over 1,500 company-operated convenience stores. The company’s integration capacity, coupled with its strength in merchandising and marketing, has consistently created compelling returns on invested capital and increased store-level adjusted EBITDA.
“ARKO has a proven ability to add value to stores with their diverse offerings and will ably serve our many loyal retail and wholesale customers. TEG would not be the success it is today if it were not for the dedication of its team members. We are excited that our team members are joining a growing and dynamic organization like ARKO,” Stephen Lattig, president and CEO of TEG, stated.
“I believe that with ARKO’s strong liquidity and proven dealmaking ability, we will continue our long-term growth strategy and grow our convenience store footprint through disciplined, accretive acquisitions,” noted Kotler.
The total purchase price for the transaction was approximately $370 million plus the value of inventory, of which $50 million is deferred, payable in two annual payments of $25 million on the first and second anniversaries of the closing, which ARKO may elect to pay in either cash or, subject to certain conditions, shares of ARKO’s common stock.
ARKO Corp. 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 U.S. Based in Richmond, Va., its highly recognizable family of community brands offers prepared foods, beer, snacks, candy, hot and cold beverages and multiple popular quick-service restaurant brands.