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GPM Investments Takes Ownership of Pride C-stores

The 31-store deal is parent company ARKO Corp.'s 22nd acquisition.
Logos for GPM Investments and Pride Convenience

RICHMOND, Va. — GPM Investments LLC is officially doing business in Massachusetts.

The Richmond-based company, a wholly owned subsidiary of ARKO Corp., closed on its $230-million acquisition of Pride Convenience Holdings LLC, which operates 31 convenience stores. The deal expands ARKO's c-store footprint into Massachusetts making it the 34th state in which the company operates.

Pride is the company's 22nd acquisition since 2013.

"ARKO's primary focus is creating long-term shareholder value by growing our core convenience store business," said Arie Kotler, ARKO's chairman, president and CEO. "We believe we can enhance the value of Pride's stores and strong regional brand through our operational and merchandising abilities and scale. We welcome Pride's employees to our Family of Community Brands and look forward to working together to enhance the business and provide value for customers."

Pride Northeast footprint comprises many large format stores, including two high-volume travel centers designed for long-haul truckers and two modern City Stop locations that cater to short-haul truckers, as well as a new-to-industry City Stop location that broke ground in July, according to ARKO.

The stores are differentiated by their 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. Additionally, Pride stores offer other food options, including Subway and Chester's Chicken franchises, along with seven high-volume beer and wine operations. Some locations also offer drive-thru service and third-party delivery options such as Door Dash, Uber and Grub Hub, according to the company.

The PrideStar proprietary app-based loyalty program also enables in-store and fuel purchases as well as access to coupons. The network sold approximately 74.2 million total fuel gallons in fiscal year 2021 with strong diesel mix at Travel Center and City Stop locations.

In addition, a network of on-site electric chargers increases the charger count in ARKO's footprint.

Since 2013, ARKO's growth strategy has increased the company's cash flow and adjusted EBITDA by transforming the company from approximately 200 stores in seven states into one of the largest convenience store operators in the United States, with approximately 1,400 company-operated convenience stores.

"I believe ARKO is in a great position, with excellent liquidity and proven dealmaking ability, to continue our long-term growth strategy and grow our convenience store footprint through disciplined, accretive acquisitions at attractive multiples," Kotler added.

The total purchase price for Pride was approximately $230 million plus the value of inventory. ARKO financed from its own sources approximately $30 million of the cash consideration including the value of inventory and other closing adjustments. The remaining approximately $202 million was funded by Oak Street, a division of Blue Owl Capital as part of the existing $1.15 billion agreement with the company, according to which Oak Street acquired the majority of the real estate assets of Pride substantially concurrently with the closing of the transaction.

The company now leases these real estate assets from Oak Street.

BMO Capital Markets Corp. acted as exclusive financial advisor to the seller.

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