Arko's GPM buys 175 gas stations in US Midwest

Arik Kotler
Arik Kotler

GPM will now have 950 gas stations in 16 US states located on the East Coast, in the Southeast, and in the Midwest.

Arko Holdings Ltd. (TASE: ARKO), controlled by Arie Kotler and Morris Willner, is continuing its development of its principal business: US fuel company GPM. Arko today announced an agreement to buy up to 175 filling stations, convenience stores, and tobacco stores in the US Midwest.

The first stage of the agreement includes the purchase of 125 sites for filling stations and convenience stores at a cost of $27-29 million, subject to adjustments. In the second stage, GPM has an option to buy the remaining sites at an undisclosed price, which is slated to be set within 45 days of the completion of the first part of the deal.

This part is subject to completion of the first stage of the deal. Completion of the various transactions is subject to due diligence and the formulation of detailed agreements. If carried out in full, GPM will have 950 filling stations in 16 US states located on the East Coast, in the Southeast, and in the Midwest.

Arko said that the company was "continuing its business strategy aimed at reinforcing GPM's business and consolidating its position as one of the leading companies in its field in the US." The Arko share price has climbed more than 30% since the beginning of the year, reflected a NIS 560 million market cap.

The steep increase in Arko's share price is a result of investors who waited for the enhancement of GPM's value in recent months, combined with the plans to float a special purpose vehicle in the US, the MLP limited partnership, which will incorporate the company's supply agreements for fuel products. At the beginning of the month, Arko announced that GPM had submitted a fourth draft prospectus to the US Securities and Exchange Commissionv (SEC), indicating that the company had already obtained investment commitments totaling up to $220 million.

Published by Globes [online], Israel business news - - on September 20, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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