GPM Petroleum Refiles With SEC for $100M IPO

RICHMOND, Va. — GPM Petroleum LP filed another Form S-1 with the U.S. Securities & Exchange Commission (SEC) to initiate an initial public offering (IPO) to raise up to $100 million by selling units of the wholesale distributor of motor fuels. The units will trade on the New York Stock Exchange under the ticker symbol GPMP.

GPM Petroleum, which began operations on Jan. 12, 2016, was formed by Richmond-based GPM Investments LLC to engage in the wholesale distribution of motor fuels on a fixed-fee-per-gallon basis to GPM-controlled convenience stores and third parties.

The April 28 filing with the SEC appears to be an extension of an S-1 filing originally made by GPM Petroleum on April, 20, 2015; however, GPM Investments Chief Operating Officer Chris Giacobone told Convenience Store News this week that he could not comment on either filing due to the company being in the mandated quiet period following an IPO filing.

According to the April 28 refiling, GPM Investments is the seventh largest convenience store chain in the United States ranked by store count; controls 805 convenience stores; and is the exclusive motor fuel supplier to an additional 132 dealer sites throughout 18 states in the Mid-Atlantic, Southeast, Midwest and Northeast regions as of March 31, 2017.

GPM Investments is obligated to purchase all of its motor fuel from GPM Petroleum under 10-year wholesale motor fuel distribution agreements. For the three months ended March 31, 2017 and the year ended Dec. 31, 2016, GPM Petroleum distributed approximately 180 million and 660.8 million gallons of motor fuel, respectively, to GPM-controlled sites and 1.4 million and 6.3 million gallons of motor fuel, respectively, to third-party customers, according to the document.

“We believe we are one of the largest independent motor fuel distributors by number of convenience stores in the United States, the largest distributor of Valero-branded motor fuel on the East Coast, and the third-largest distributor of Valero-branded motor fuel in the United States,” the April 28 filing states.

In the document signed by GPM Investments President and CEO Arie Kotler, the company also reports that the total amount of motor fuel GPM Petroleum sold grew from 284.7 million gallons during 2012 to more than 667 million gallons during 2016, primarily as a result of a series of convenience store acquisitions by GPM Investments. Since Jan. 1, 2012, the number of GPM-controlled convenience stores has grown from 203 to 805, while the amount of motor fuel sold to such convenience stores has increased from 220.8 million gallons during 2012 to 597.1 million gallons during 2016.

GPM Petroleum further states that it should be able to thrive as a publicly traded independent company based upon a host of factors, including:

  • Stable cash flows;
  • A strong and experienced management team;
  • Long-term relationships with independent oil companies and independent refiners;
  • Geographically diverse operations; and
  • An established history of acquiring sites and successfully integrating the associated operations.

Looking ahead, Kotler outlined several business strategies for GPM Petroleum’s growth, including purchasing the right to provide wholesale motor fuel to convenience stores that may be acquired by GPM Investments, as well as by directly acquiring wholesale motor fuel businesses with existing dealer operations.

“Through GPM’s expansion, we plan to further develop our wholesale motor fuel distribution both within our existing area of operations and in new geographic areas. We believe GPM has considerable opportunity to serve as a consolidator in our industry,” the most recent filing states.

“As GPM continues to make acquisitions, we have the right, under the right of first offer contained in the omnibus agreement, to purchase distribution rights to any new locations GPM acquires in the future,” the filing continues.

Post IPO, GPM Petroleum expects to have plenty of funds available to pursue accretive acquisitions. “We believe our strong balance sheet and ability to access the debt and equity capital markets will provide us with the financial flexibility to pursue accretive acquisition and expansion opportunities,” the company stated in the SEC document.

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