RICHMOND, Va. — Arko Corp., the parent company of GPM Investments, is touting its recent agreement to acquire Pride Stores in the Northeast as demonstrating the company’s ability to continue its decade-long growth momentum.
Noting the Pride Stores deal in tandem with its recent agreement to acquire Transit Energy Group (TEG), Arko said the pending acquisitions “exemplif[y] the company’s systematic growth strategy, which, since 2013, has significantly increased the company’s cash flow and adjusted EBITDA by transforming the company from approximately 200 stores in seven states into one of the largest convenience store operators in the United States, with over 1,388 company-operated convenience stores acquired through 21 acquisitions.”
The Pride Stores acquisition combined with the TEG deal, announced in September, “are expected to grow the company’s base of convenience stores by approximately 15%, adding 181 stores and a pipeline of new build opportunities,” Arko said in announcing the Pride agreement.
- GPM Investments is No. 6 on CSP’s 2022 Top 202 ranking of U.S. convenience-store chains by store count. Transit Energy Group, West Memphis, Ark., is No. 65. Pride Stores, based in Springfield, Mass., ranked No. 188.
“With our liquidity and dealmaking ability, we believe we have a long runway to continue our long-term growth strategy, making disciplined, accretive acquisitions at attractive multiples to continue growing our convenience store footprint,” said Chairman, President and CEO Arie Kotler.
The Pride Stores deal is the second major acquisition by Arko since it secured a $1.15 billion commitment from Oak Street Real Estate Capital in April to fund growth of the convenience-store chain and fuel wholesale network.
With a total purchase price of approximately $230 million plus the value of inventory, Arko intends to finance from its own sources approximately $28.0 million of the cash consideration plus the value of inventory and other closing adjustments. The remaining approximately $202 million is expected to be funded by Oak Street Real Estate Capital, a division of Blue Owl Capital, as part of the existing $1.15 billion agreement. Arko will lease the real-estate assets from Oak Street.
The Pride Deal
Meanwhile, the Pride Stores acquisition is a significant market expansion for GPM Investments, entering Massachusetts for the first time. Parent company Pride Convenience Holdings LLC is well respected in its markets, with nearly 50 years of continuous operations building brand equity in the region. The retailer, which operates 31 convenience stores, put its chain up for sale more than a year ago.
CEO Robert Bolduc told the The Republican newspaper that he notified his employees on June 15, 2021, of a possible sale. “I’m exploring my options,” Bolduc told the paper. “We’re a family and this is the way it’s got to be.”
Private equity firm Arclight Capital Partners LLC, Boston, acquired Pride in early 2022.
Some features of the Pride Stores chain:
- Its holdings include two high-volume travel centers and two City Stop locations.
- One new-to-industry City Stop location broke ground in July 2022.
- Its PrideStar proprietary app-based loyalty program enables in-store and fuel purchases, as well as access to coupons.
- Well-known foodservice offerings include fresh-baked goods at all stores.
- Fresh food options such as sandwiches, wraps and salads are made and delivered through a company-owned central kitchen. They are sold through in-store Pride Kitchens and available as grab-and-go options. Stores also offer popular quick-service options, including Subway and Chester’s Chicken franchises.
- Many stores offer drive-through service and delivery options.
- The sites sold approximately 74.2 million total fuel gallons fiscal year 2021.
- The chain includes a network of on-site electric chargers.
Founded in 2003, GPM has grown through acquisitions to become the sixth largest convenience store chain in the United States, with approximately 2,950 locations, including approximately 1,350 company-operated stores and approximately 1,600 dealer sites to which it supplies fuel in 33 states and Washington, D.C.
The company 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, as well as sub-wholesalers and bulk purchasers.
Brands include Fas Mart, Shore Stop, Scotchman, BreadBox, Young's, Li'l Cricket, Next Door Store, Village Pantry, Apple Market, Jiffi Stop, Admiral, Roadrunner Markets, Jiffy Food Marts, E-Z Mart, 1 Stop and TownStar.