ARKO Reportedly Exploring Sale of C-store Assets
RICHMOND, Va. — ARKO Corp. could be making plans to exit the convenience store industry by divesting its retail operations in a deal that could be valued at $2 billion, according to anonymous inside sources.
The company is working with investment bankers at Citigroup to sell its portfolio of 1,500-plus stores, people familiar with the matter told Reuters. Such a move would reverse course on multiple years of expansion, which included a 2023 attempt to beat out bp to acquire TravelCenters of America, following a slowdown in c-store sales.
[Read more: ARKO Weathers Challenging Q2 2024]
ARKO would retain its fuel distribution business, as it believes could help the company achieve a higher valuation as a standalone fuel distributor, the sources said. ARKO currently supplies fuel to more than 1,800 independent dealer sites and around 300 unmanned fleet fueling locations.
The company's c-stores reportedly generate approximately $300 million of annual earnings before interest, taxes, depreciation and amortization. Potential buyers include other c-store chains and private equity firms, who have submitted initial bids. A deal is not guaranteed, the sources added.
Neither ARKO nor Citigroup commented on the alleged sale plans.
Richmond-based ARKO owns 100% of GPM Investments LLC and is one of the largest operators of convenience stores and wholesalers of fuel in the United States. ARKO 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; GPM Petroleum, which sells and supplies fuel to its retail and wholesale sites and charges a fixed fee, primarily to its 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.
ARKO is No. 6 on the 2024 Convenience Store News Top 100 ranking.