The GPM partnership, Arko Holdings Ltd.'s (TASE: ARKO) filling stations and convenience stores arm in the US, is going on the US stock exchange. As part of the offering it is planning, the company plans to raise up to $100 million at an estimated company value of $400-450 million, after money. Arko today reported the filing of a prospectus with the US Securities and Exchange Commission (SEC) for the issuing of participation units through an S-1 document called a master limited partnership (MLP).
Arko said that the partnership in question had begun its activity in January 2016, through which its fuel purchases and supplying had been concentrated. At that time, it had held a $70 million private placement for two Oppenheimer group funds at a company value of $310 million, after money.
The current offering will probably take place at a company value considerably higher than the value for the private placement. GPM currently holds 78% of the partnership units, and the exact proportion of its holdings in the participation units to be issued will be determined according to the terms, extent, and structure of the offering. GPM operates nearly 1,000 convenience stores in the US located next to filling stations, and supplies fuel to 135 filling stations in 18 US states. Earlier this year, GPM acquired nearly 100 filling stations and convenience stores (and seven fast food restaurants) for $160 million, a deal expanded GPM's business on the US east coast.
The Arko share price responded to the news with a 3-4% rise, bringing its gain since the beginning of the year to over 70%, reflecting a NIS 1.4 billion market cap. The company share price has soared by an impressive 950% over the past five years,
Increase in revenue
Arko's controlling shareholders, CEO Arie Kotler and his US partner, Morris Willner, last February sold 4.5% of Arko's share capital for NIS 60 million (most of the shares were sold by Willner) at a value similar to the current market price.
The prospectus published by GPM indicates that the company's revenue over the past 12 months (ending on March 31) totaled $1.15 billion, and its net profit in this period amounted to $31 million. Arko's revenue totaled NIS 7.5 billion in 2016, 11% more than in 2015. The company posted a NIS 21 net loss in 2015.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 30, 2017
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