ARKO Grows Southwest Footprint With WTG Fuels Deal
RICHMOND, Va. — ARKO Corp. closed the books on its 24th acquisition since 2013 and its second completed deal in 2023 with the purchase of WTG Fuels Holdings LLC, owner of Uncle's Convenience Stores and GASCARD fleet fueling operations, for approximately $140.2 million plus the value of inventory at closing.
"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 CEO 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," Kotler continued. "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."
[Read more: ARKO's Three Key Pillars of Marketing & In-Store Initiatives Drive Positive Q1 2023 Results]
ARKO announced in December 2022 that the company would grow its footprint in key Texas and New Mexico markets and increase its fleet fueling operations by acquiring WTG through subsidiaries.
Founded in 1976, WTG is a leading Texas convenience retailer with 24 company-operated c-stores across western Texas. Uncle's offers convenient grocery, beer and fresh food options. The chain is known for its high-quality foodservice, including Uncle's branded fresh food, Hunt Brothers Pizza and Champs Chicken. Certain stores additionally feature walk-in beer caves.
As part of the deal, ARKO also acquired one of the largest fleet fueling operations in west Texas, consisting of 68 proprietary GASCARD-branded fleet fueling cardlock sites and 43 private cardlock sites. Nearly 75 percent of fuel sales by volume at the cardlock locations have been diesel. WTG also 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 company said.
The WTG deal additionally includes three land parcels and nine independent dealer locations.
To close the acquisition, 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, as part the companies' existing agreement.
Richmond-based ARKO, which owns 100 percent of GPM Investments LLC, operates 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; 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; and GPM Petroleum, which sells and supplies fuel to its retail and wholesale sites and charges a fixed fee, primarily to its fleet fueling sites.