Arko Holdings further expands US fuel station business

Arie Kotler, photo: PR

Through its GPM subsidiary, Arko Holdings has bought or leased 267 fuel station and convenience store sites.

Arko Holdings Ltd. (TASE: ARKO), controlled by Arie Kotler and Morris Willner, continues to expand its fuel stations and convenience stores business in the US. The company notified the Tel Aviv Stock exchange this morning that its 70%-owned subsidiary GPM had completed a complex deal for the purchase and lease of 267 fuel station and convenience store sites, as well as the business of supplying fuel to six fuel stations located in Arkansas, Louisiana, Oklahoma, and Texas. The deal includes the purchase of the E-Z Mart convenience store chain founded in 1970 by Jim Yates.

The deal was mainly financed by two REITs in the US, which bought 78 sites for $138 million. Through GPM, Arko will lease from them and operate all the fuel stations and convenience stores for $10 million annually. GPM paid $60 million for the remaining 48 sites, after receiving a loan of $48 million from Arko Holdings. GPM also paid the cost of the deal, amounting to $7.5 million. A further 147 sites will be leased to GPM for 15 years, with an extension option, for $10 million a year.

Completion of the deal brings GPM's business in the US to a total of 1,224 sites plus supply of fuel to 138 fuel stations operated by other concerns, in 22 states.

Arko Holdings' share price responded to the news of the current deal with a rise of 3%. The company has a market cap of NIS 1.5 billion, after a 450% rise in its share price in the past five years.

Arko Holdings chairman and CEO Arie Kotler said, "The current deal, in which we bought an old-established and well-known chain the southern US, continues the consolidation of GPM's position as a leading company in the US convenience store industry. Completion of the deal brings Arko to fifth place among convenience store chains in the US. We are constantly examining opportunities for furthering the company's leadership in convenience stores and giving added value to its shareholders."

Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Arie Kotler, photo: PR
Arie Kotler, photo: PR
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