ARKO Expands Convenience Store Footprint Into Massachusetts Via Pride Acquisition

ARKO Corp ARKO subsidiary GPM has agreed to acquire Pride Convenience Holdings, LLC, for a total purchase price of $230 million plus the value of inventory.
Pride Convenience operates 31 convenience stores, with many large format stores, including two high-volume Travel Centers for long-haul truckers and two modern City Stop locations that cater to short-haul truckers.
This acquisition would expand ARKO's convenience store footprint into Massachusetts, making it the 34th state in which it will operate.
Additionally, Pride operates a centralized kitchen that provides fresh baked goods and food daily to all Pride stores.
ARKO's agreement to acquire Pride and the recently announced agreement to acquire Transit Energy Group combined will grow its base of convenience stores by approximately 15%.
ARKO will pay $28 million in cash. The remaining $202 million will be funded by Oak Street Real Estate Capital, a Division of Blue Owl Capital, as part of the existing $1.15 billion agreement with the company.
The company held $297 million in cash and equivalents as of June 30, 2022.
ARKO would lease the real estate assets from Oak Street, which is expected to acquire the real estate assets of Pride as part of the transaction.
The company expects the acquisition to add $12.2 million of Adjusted EBITDA on an annual run rate, including synergies, after incremental annual rent of $12.2 million to be paid to Oak Street.
Price Action: ARKO shares are trading higher by 5.97% at $9.85 on the last check Monday.

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