GPM Adding to Its Midwest Portfolio via Acquisition

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RICHMOND, Va. — GPM Investments LLC's acquisition pace is not letting up.

In its latest move, the Richmond-based company entered into a non-binding letter of intent (LOI) to acquire approximately 60 self-operated convenience stores in several U.S. Midwestern states. Consideration for the transaction is approximately $100 million, plus the value of inventory and cash in stores.

The names of the sellers were not released in a recent Form 8-K filed with the U.S. Securities & Exchange Commission.

The terms of the LOI include the potential acquisition of four additional c-stores that the sellers are currently negotiating to acquire. GPM would acquire those four sites for additional consideration.

The new pact represents a continuation of GPM's strategy to consolidate the fragmented convenience store marketplace, and to drive returns for investors, according to the company.

In September, GPM parent Arko Holdings Ltd. entered into a definitive agreement with Haymaker Acquisition Corp. II, a publicly traded special purpose acquisition company, to form a business combination. The transaction is slated to close before the end of the year, as Convenience Store News previously reported.

Arko shareholders approved the tie-up on Nov. 18, and Haymaker stockholders will vote during a special meeting on Dec. 8.

"This vote was an important milestone for Arko, and we are thrilled to receive the support of our shareholders as we move forward with our business combination with Haymaker. As I have previously stated, I am proud to be rolling over at least 90 percent of my ownership to become the combined company's largest individual investor, joining seasoned institutional investors including Davidson Kempner, Ares and Harvest Partners who have elected to rollover 100 percent of their current equity holdings," said Arie Kotler, chairman and CEO of Arko Holdings.

"We believe we have a long runway of growth in this attractive and fragmented industry and look forward to building on our track record of success as we look towards the completion of our business combination and resulting Nasdaq listing," he added.

With its available line of credit and the infusion of capital that the Haymaker combination is expected to add to the balance sheet, GPM plans to continue its strategy to grow through acquisition. It is also launching a remodel initiative, and unveiled a new store prototype in mid-November.

Founded in 2003 with 169 stores, GPM has grown through acquisitions to become the seventh largest c-store chain in the United States with 2,930 locations comprised of 1,350 company-operated stores and 1,580 dealer sites in 33 states and Washington, D.C. GPM operates in three segments: retail, wholesale, and GPM Petroleum, which supplies fuel to GPM and its subsidiaries selling fuel (both in the retail and wholesale segments) as well as subwholesalers and bulk purchasers.