RICHMOND, Va. — A private U.S. investment fund has signed a non-binding letter of intent to acquire partnership participation units of GPM Investments LLC for $62.5 million, according to a Globes report. The buyer's name was not disclosed.
The partnership is controlled by GPM parent company Arko Holdings Ltd. The buying fund will purchase the participation units from Arko Holdings and investment fund Davidson Kemper.
The buying fund may also invest $30 million directly into GPM in the future to help it expand its operations, which are currently based primarily along the East Coast.
The buying fund will purchase all of Arko and Davidson Kemper's new preferred participation units in GPM for a total of $47.5 million, according to the agreement. The new units, which are equally divided between Arko and Davidson Kemper, provide a $37.5-million repayment of the investment and an 8.75-percent annual return.
Following the acquisition's completion, the conditions of the preferred units will be changed to represent 7.5 percent of the value of rights in GPM's capital and provide preferred rights in divided distribution and other matters.
The buying fund will purchase another 2.5 percent regular GPM participation units from Davidson Kemper for $15 million, after which Davidson Kemper will control 22.5 percent of the regular units and Arko will continue to control 75 percent.
The purchase deal reflects a $630-million company valuation for GPM, according to Arko.
"The fund's entry into GPM at a valuation of $630 million is indicative of the company's achievements in the past few years and of the results of the implementation of the strategic plan, which focuses on expanding GPM's operations and turning it into a leading fuel and convenience store company throughout the U.S.," stated Arko Chairman and CEO Arie Kotler.
Davidson Kemper also reportedly notified Arko that it is considering submitting an offer to purchase Arko shares totaling nearly $10 million to compensate for its diminishing holdings in GPM. The price of this offer has not been determined.
Along with its subsidiaries, Richmond-based GPM Investments' portfolio currently consists of 850 convenience stores.