RICHMOND, Va.—ARKO Corp. announced today that its GPM subsidiary has agreed to acquire 121 branded and 64 contracted cardlock sites from Quarles Petroleum Inc. in the Mid-Atlantic region to enhance its fuel supply and distribution capabilities. The multimillion-dollar acquisition will add about 200 million gallons to the approximately two billion gallons of fuel that ARKO sells each year, the company said.
Quarles, based in Fredericksburg, Virginia, is the largest fleet fueling cardlock operator on the U.S. East Coast, with operations in Virginia, North Carolina, Maryland, Pennsylvania, and the District of Columbia. Quarles services a diverse base of commercial customers across multiple industries, meeting their fueling needs at easily accessible commercial sites.
“We believe that this high-volume, 24/7/365 business in prime locations cannot be replicated today and will drive strategic growth,” said Arie Kotler, president and CEO of ARKO. “The acquisition of these assets complements and expands our core wholesale strategy, adding a mature fleet fueling platform and boosting our supply and distribution capabilities within our 33 states and Washington, D.C. fuel supply footprint.”
ARKO said the deal is part of the company’s strategic focus on growth and generating long-term shareholder value with its dual convenience and wholesale platform. At the time of signing an asset purchase agreement, using estimated forward-looking non-GAAP measures, the company expects that the acquisition will add about $17.3 million of adjusted Ebitda on an annualized basis after incremental rent of about $7.7 million to be paid to Oak Street Real Estate Capital LLC, the private equity real estate firm who will fund roughly $130 million of the purchase price.
“Quarles has focused on building a commercial fleet fueling business with expanded site access, superior quality fuels and fleet card features that provide fleet operators with a comprehensive fueling solution,” said Paul Giambra, president and CEO of Quarles Petroleum. “Quarles and ARKO share a commitment to excellent service and providing the best possible solutions for our customers.”
The transaction is expected to close during the second quarter.
For more about ARKO’s vision for its future, read “Tying it All Together” from the March 2021 issue of NACS Magazine.