ARKO Holdings, Ltd. / GPM Investments, LLC (“Arko,” “GPM” or the
“Company”), a rapidly growing leader in the U.S. convenience store
industry, today announced the closing of the previously announced
acquisition of Empire Petroleum Partners’ (“Empire”) fuel
distribution business and retail locations. The acquisition
meaningfully increases GPM’s scale and diversifies its business
mix, while significantly increasing the Company’s cash flow through
increased exposure to a highly ratable, consistent wholesale fuel
distribution business, and brings its total site count to
approximately 3,000 across 33 states.
“The completion of this highly strategic acquisition is an
important milestone for Arko as we move forward with our business
combination with Haymaker. This acquisition provides meaningful
benefits through scale while increasing our competitiveness as an
acquirer of choice,” said Arie Kotler, Chief Executive Officer of
Arko and GPM. “With the closing of this transaction, we expect to
double our annual fuel distribution to over 2 billion gallons on an
annualized basis, while capturing significant
synergies to drive increased profitability to the combined
company.”
“Combined with our other strategic initiatives – including our
continued core acquisition strategy as well as our planned
aggressive remodeling program and compelling organic sales growth
opportunities – this transaction further strengthens our confidence
in our ability to drive significant growth and market share gains
going forward,” said Kotler.
Steven Heyer, Chairman and CEO of Haymaker Acquisition Corp. II
and former President and COO of the Coca-Cola Company, commented,
“We could not be more excited about the closing of this
transformative transaction for ARKO/GPM. It is emblematic of the
tremendous opportunity set in front of the company, as well as the
focused and disciplined approach that Arie and team take to
executing and closing acquisitions. We believe the addition of
Empire will generate meaningful value to the combined company going
forward.”
The Empire business, one of the largest and most diversified
wholesale fuel distribution businesses in the U.S., will add
approximately 1,500 independently operated fueling stations to
GPM’s existing fuel distribution network. Currently the
seventh-largest convenience store chain in the
U.S., GPM will also add approximately 85 company-operated
convenience stores and will materially increase its footprint,
expanding the Company’s reach into 10 new states of operation as
well as the District of Columbia.
Empire’s wholesale fuel distribution business complements GPM’s
retail business and will serve as an additional vehicle for the
Company’s future acquisitions and organic growth. In addition, the
acquisition will increase GPM’s scale, further diversify the
Company’s existing cash flow and augment GPM’s strategic
flexibility to rationalize sites between its retail and wholesale
business. GPM will operate its wholesale division out of Empire's
Dallas, TX offices and will be transitioning Empire's team to GPM
as part of the transaction.
Empire is a portfolio company of American Infrastructure Funds
(“AIM”). Barclays and Wells Fargo served as co-financial advisors
to Empire. Capital One Securities, Inc. served as financial advisor
to GPM Petroleum LP. In addition, Capital One, National Association
serves as Administrative Agent, Lead Arranger and Bookrunner to
GPM's $500 million Revolving Credit Facility (the "Credit
Facility"). KeyBanc Capital Markets Inc. and Santander Bank,
N.A. also serve as Joint Lead Arrangers and Joint Bookrunners to
the Credit Facility.
The closing of the transaction follows the Federal Trade
Commission’s approval on August 25, 2020. GPM originally entered
into an agreement to purchase Empire Petroleum’s business in
December 2019.
The completed acquisition comes amid Arko’s pending business
combination with Haymaker Acquisition Corp. II, a special purpose
acquisition corporation (SPAC) (the “Business Combination”). The
Business Combination, which is expected to close in the fourth
quarter of 2020, is expected to result in the combined company
becoming publicly-listed on the NASDAQ stock exchange under the
ticker ARKO.
About GPM and Arko:Based in Richmond, VA, GPM
was founded in 2003 with 169 stores and has grown through
acquisitions to become the 7th largest convenience store chain in
the United States, with, prior to consummation of the Empire
acquisition, 1,389 locations comprised of 1,250 company-operated
stores and 139 dealer sites to which it supplies fuel, in 23
states. GPM operates in three segments: retail, which consists of
fuel and merchandise sales to retail consumers; wholesale, which
supplies fuel to third-party dealers and consignment agents; and
GPM Petroleum, which supplies fuel to GPM and its subsidiaries
selling fuel (both in the Retail and Wholesale segments).
Arko is the controlling shareholder of GPM and, as part of the
Business Combination, the shares of Arko will be de-listed from
Tel-Aviv stock exchange. At the closing of the Business Combination
with Haymaker, Arko will have no material independent operating
activities, income, or net assets, other than its ownership
interest in GPM.
About American Infrastructure Funds:AIM is a
leading private investment firm based in the San Francisco Bay
Area. With approximately $3 billion in assets under management, AIM
brings innovative investment capital to support the growth of real
property, infrastructure and natural resource-related businesses.
For more information, please visit www.aimlp.com.
About Haymaker:Haymaker is a $400 million blank
check company formed for the purpose of entering into a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses. Haymaker’s acquisition and value creation strategy is
to identify, acquire and, after its initial business combination,
build a company in the consumer, retail, media, or hospitality
industries. Haymaker is led by Chief Executive Officer and
Executive Chairman Steven J. Heyer, President Andrew R. Heyer,
Chief Financial Officer Christopher Bradley, and Senior Vice
President Joseph Tonnos. For more information about Haymaker,
please visit www.haymakeracquisition.com.
Additional Information and Where to Find ItARKO
Corp. filed a registration statement on Form S-4 on September 10,
2020, which includes a prospectus with respect to ARKO Corp.’s
securities to be issued in connection with the Business Combination
and a proxy statement with respect to Haymaker’s stockholder
meeting to vote on the Business Combination (the “Haymaker proxy
statement/prospectus”), with the SEC. In addition, Arko filed a
proxy statement (the “Arko proxy”), which includes the Haymaker
proxy statement/prospectus as an exhibit thereto, with the Israel
Securities Authority (the “ISA”) on October 7, 2020. ARKO Corp.,
Haymaker, GPM and Arko urge investors and other interested persons
to read the Haymaker proxy statement/prospectus and, when
available, the Arko proxy, as well as other documents filed with
the SEC and the ISA, because these documents will contain important
information about the Business Combination. The Haymaker proxy
statement/prospectus and other relevant materials for the Business
Combination will be mailed to stockholders of Haymaker as of a
record date to be established for voting on the Business
Combination. The Haymaker proxy statement statement/prospectus can
be obtained, without charge, at the SEC’s web site
(http://www.sec.gov).
Participants in the SolicitationARKO Corp.,
Haymaker, Arko, GPM and their respective directors, executive
officers and other members of their management and employees, under
SEC rules, may be deemed to be participants in the solicitation of
proxies of Haymaker stockholders in connection with the Business
Combination. Investors and securityholders may obtain more detailed
information regarding the names, affiliations and interests of
Haymaker’s directors and officers in its Annual Report on Form 10-K
for the fiscal year ended December 31, 2019, which was filed with
the SEC on March 19, 2020 and is available free of charge at the
SEC’s web site at www.sec.gov.
Information regarding the persons who may, under SEC rules, be
deemed participants in the solicitation of proxies to Haymaker’s
stockholders in connection with the Business Combination is also
contained in the Haymaker proxy statement/prospectus.
Forward-Looking Statements:This press release
includes “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. The expectations, estimates, and projections of
the businesses of ARKO Corp., Haymaker, Arko and GPM may differ
from their actual results and consequently, you should not rely on
these forward-looking statements as predictions of future events.
Words such as “expect,” “estimate,” “project,” “budget,”
“forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,”
“should,” “believes,” “predicts,” “potential,” “continue,” and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, expectations with respect to future performance and
anticipated financial impacts of the Empire acquisition or the
Business Combination, the satisfaction of the closing conditions to
the Business Combination, and the timing of the completion of the
Business Combination. These forward-looking statements involve
significant risks and uncertainties that could cause the actual
results to differ materially from the expected results. Most of
these factors are outside of the control of Arko Corp., Haymaker,
Arko and GPM, and are difficult to predict. Factors that may cause
such differences include, but are not limited to: (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the definitive agreements with
respect to the Business Combination, (2) the outcome of any legal
proceedings that may be instituted against the parties following
the announcement of the Business Combination and any definitive
agreements with respect thereto; (3) the inability to complete the
Business Combination, including due to failure to obtain approval
of the stockholders of Haymaker and Arko or other conditions to
closing; (4) the impact of the COVID-19 pandemic on (x) the
parties' ability to consummate the Business Combination and (y) the
business of Arko and the combined company; (5) the receipt of an
unsolicited offer from another party for an alternative business
transaction that could interfere with the Business Combination; (6)
the inability to obtain or maintain the listing of ARKO Corp.’s
common stock on Nasdaq following the Business Combination; (7) the
risk that the Business Combination disrupts current plans and
operations as a result of the announcement and consummation of the
Business Combination; (8) the ability to recognize the anticipated
benefits of the Business Combination, which may be affected by,
among other things, competition, the ability of the combined
company to grow and manage growth profitably and retain its key
employees; (9) costs related to the Business Combination; (10)
changes in applicable laws or regulations; (11) the demand for
Arko’s and the combined company’s services together with the
possibility that Arko or the combined company may be adversely
affected by other economic, business, and/or competitive factors;
(12) the number of shares submitted for redemption by Haymaker’s
stockholders in connection with the stockholder meeting to approve
the Business Combination; (13) risks and uncertainties related to
Arko’s business, including, but not limited to, changes in fuel
prices, the impact of competition, environmental risks,
restrictions on the sale of alcohol, cigarettes and other smoking
products and increases in their prices, dependency on suppliers,
increases in fuel efficiency and demand for alternative fuels for
electric vehicles, failure by independent outsider operators to
meet their obligations, acquisition and integration risks, and
currency exchange and interest rates risks; (14) failure to realize
the expected benefits of the acquisition of Empire; (15) failure to
promptly and effectively integrate Empire’s business; (16) the
potential for unknown or inestimable liabilities related to the
Empire business; and (17) other risks and uncertainties included in
(x) the “Risk Factors” section of the Haymaker proxy
statement/prospectus and (y) other documents filed or to be filed
with the SEC by Haymaker and with the ISA by Arko. The foregoing
list of factors is not exclusive. You should not place undue
reliance upon any forward-looking statements, which speak only as
of the date made. ARKO Corp., Haymaker, Arko, and GPM do not
undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in their expectations or any change in
events, conditions, or circumstances on which any such statement is
based.
No Offer or SolicitationThis press release
shall not constitute a solicitation of a proxy, consent, or
authorization with respect to any securities or in respect of the
Business Combination. This press release shall also not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any states
or jurisdictions in which such offer, solicitation, or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Investor ContactsFarah Soi,
CFACaitlin Churchill(203) 682-8200HaymakerII@icrinc.com
Media ContactKeil Decker(646)
277-1200HaymakerII@icrinc.com
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