Haymaker and Arko combine to expand U.S. convenience store business

biote

13/07/2020 13:02

JERUSALEM, July 13 (Reuters) - Haymaker Acquisition Corp II
 HYAC.O  has agreed to acquire Israel's Arko Holdings  ARKO.TA 
and its majority-owned U.S. convenience store chain GPM in a
deal that would value the combined entity at $1.5 billion, the
companies said on Monday.
    Arko owns 68% of GPM Investments, which operates 1,272
convenience stores and delivers fuel to 128 sites across 23 U.S.
states. Haymaker is a special purpose vehicle created to make an
acquisition in consumer-related products and services
industries.
    "We expect long-term institutional investors and management
to roll over significant equity at an attractive valuation
relative to U.S.-listed peers," said Haymaker Chief Executive
Steven Heyer.
    Haymaker said it would continue to expand GPM's platform and
pursue strategic initiatives jointly with Arko Chief Executive
Arie Kotler.
    GPM said growth had accelerated during the COVID-19 pandemic
as consumers shifted shopping patterns to convenience stores
from other channels and that it would benefit further if more
travel in the United States moved from flying to driving.
    Under the deal, Haymaker would pay $200 million in cash,
$150 million of which would go to Arko shareholders and the rest
to the remaining shareholders in GPM. Arko shareholders will
also retain 40% of the combined company.
    Haymaker and Arko said they would announce additional
details regarding the merger when a definitive agreement is
signed, most likely in the third quarter, with the deal expected
to close before the end of 2020. 
    Should the deal materialise, Arko would be delisted from the
Tel Aviv Stock Exchange and the combined company would be traded
on the U.S. Nasdaq. The deal would need approvals from the
companies' boards and shareholders as well as regulators.

 (Reporting by Steven Scheer; Editing by David Clarke)
 ((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters
Messaging: steven.scheer.thomsonreuters.com@reuters.net;
Twitter: @StevenMScheer))