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ARKO Expands Convenience Store Footprint Into Massachusetts Via Pride Acquisition

  • ARKO Corp (NASDAQ: 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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