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10/24/2022

GPM Investments Inks Deal for Pride Convenience Holdings

The $230 million acquisition will add a 34th state to the company's footprint.
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Logos for GPM Investments and Pride Convenience

RICHMOND, Va. — GPM Investments LLC is growing in the Northeast.

The wholly owned subsidiary of ARKO Corp. is acquiring Pride Convenience Holdings LLC, which operates 31 convenience stores in New England. The acquisition will expand ARKO's c-store footprint into Massachusetts, making it the 34th state in which the company will operate.

Springfield, Mass.-based Pride operates many large format stores, including two high-volume travel centers for long-haul truckers and two modern City Stop locations that cater to short-haul truckers. Additionally, it operates a centralized kitchen that provides fresh baked goods and food daily to all its stores.

The total purchase price for Pride is approximately $230 million plus the value of inventory.

"Our agreement to acquire Pride highlights ARKO's continued focus on creating long-term shareholder value by growing our core convenience store business," said Arie Kotler, ARKO's chairman, president and CEO. "We believe Pride stores are top-tier assets, with a focus on excellent customer service and a quality loyalty program, and we further believe that we can add value to these assets through our operational and merchandising abilities and scale.

"We look forward to welcoming Pride's employees to our Family of Community Brands and working together to enhance the business," Kotler added.

Pride stores offer a fresh food selection supported by its corporate kitchen and bakery, which provides bakery items, sandwiches and other items to in-store Pride Kitchens and as grab-and-go options made fresh daily.

The stores also include Subway and Chester's Chicken franchises, along with seven high-volume beer and wine operations. Some locations feature drive-thru service, and third-party delivery options such as DoorDash, Uber and Grubhub are also available.

"Pride is a success because of its dedicated team members, and we are excited for the opportunity to join a growing, long-term focused convenience store company with the scale Pride needs to continue enhancing our excellent offerings and strong brand name," said Marsha Medina, CEO of Pride.

The deal comes less than a year after Arclight Capital Partners purchased Pride from owner Bob Bolduc.

ARKO's Growth

ARKO's agreement to acquire Pride and the recently announced agreement to acquire Transit Energy Group (TEG) highlights the company's systematic growth strategy. Since 2013, the company has significantly increased its cash flow and adjusted EBITDA by transforming the company from approximately 200 stores in seven states to more than 1,388 company-operated convenience stores acquired through 21 acquisitions, according to the company.

Combined, Pride and TEG are expected to grow the company's base of convenience stores by approximately 15 percent, adding 181 stores and a pipeline of new build opportunities.

"With our liquidity and dealmaking ability, we believe we have a long runway to continue our long-term growth strategy, making disciplined, accretive acquisitions at attractive multiples to continue growing our convenience store footprint," Kotler said.

At closing, ARKO intends to finance from its own sources approximately $28 million of the cash consideration plus the value of inventory and other closing adjustments. The remaining approximately $202 million is expected to be funded by Oak Street Real Estate Capital, a division of Blue Owl Capital as part of the existing $1.15 billion agreement with the company. Oak Street is expected to acquire the real estate assets of Pride as part of the transaction and ARKO will lease the real estate assets.

The closing of the transaction is subject to fulfillment of conditions precedent. There is no certainty that the transaction will close. BMO Capital Markets Corp. is acting as exclusive financial advisor to the seller.

Richmond-based ARKO Corp. owns 100 percent of GPM Investments. It operates in four reportable segments: retail, which includes convenience stores selling fuel products and other merchandise to retail customers; wholesale, which supplies fuel to independent dealers and consignment agents; GPM Petroleum, which sells and supplies fuel to our retail and wholesale sites; and fleet fueling, which operates proprietary cardlock locations, manages third-party cardlock locations, and markets fuel cards that give customers access to a nationwide network of fueling sites.