ARKO to acquire Northeast US convenience store operator Pride Convenience
ARKO Corp., a NASDAQ-listed convenience store operator, has agreed to acquire Pride Convenience Holdings for around $230 million, excluding the value of inventory.
The acquisition of the convenience store operator in Northeast US will be executed by ARKO’s fully-owned subsidiary GPM Investments.
As part of the transaction, ARKO will acquire 31 convenience stores, which include a couple of Travel Centers for long-haul truckers and two City Stop locations that serve short-haul truckers. The deal will help increase the footprint of ARKO’s convenience stores in Massachusetts, the 34th American state in which it will operate.
In the financial year 2021, Travel Center and City Stop locations reportedly sold around 74.2 million total fuel gallons, dominated by diesel.
Through the acquisition of Pride Convenience, ARKO will also increase its network of on-site electric chargers.
Arie Kotler — ARKO chairman, president, and CEO said: “Our agreement to acquire Pride highlights ARKO’s continued focus on creating long-term shareholder value by growing our core convenience store business.
“We believe Pride stores are top-tier assets, with a focus on excellent customer service and a quality loyalty program, and we further believe that we can add value to these assets through our operational and merchandising abilities and scale.”
Pride Convenience also runs a centralized kitchen that offers fresh baked goods and food on a daily basis to all its convenience stores.
The Northeast convenience store operator also operates Subway and Chester’s Chicken franchises, along with seven beer and wine operations.
Pride Convenience also offers drive-through service at certain convenience stores and utilization of food delivery services such as Door Dash, Grub Hub, and Uber.
Marsha Medina — Pride Convenience CEO said: “Pride is a success because of its dedicated team members, and we are excited for the opportunity to join a growing, long-term focused convenience store company with the scale Pride needs to continue enhancing our excellent offerings and strong brand name.”
ARKO is planning to finance the proposed acquisition from its own sources around $28 million of the cash consideration along with the value of inventory and other closing adjustments.
Oak Street Real Estate Capital, a unit of Blue Owl Capital, is likely to fund the remaining amount of around $202 million as part of an existing $1.15 billion agreement with ARKO.
Under the agreement, Oak Street is said to acquire the real estate assets of Pride Convenience while ARKO would lease the real estate assets from the Blue Owl Capital unit.
The closing of ARKO acquisition of Pride Convenience is subject to fulfilment of certain preceding conditions.