ARKO Finalizes Purchase of Transit Energy Group

With the previously announced acquisition, the convenience retailer expands into Alabama and Mississippi.

March 03, 2023

RICHMOND, Va.—ARKO Corp. announced that the subsidiaries of ARKO have completed a previously announced acquisition, acquiring the assets of Transit Energy Group (TEG) and its affiliates, which operate about 135 convenience stores, supply fuel to about 190 independent dealers, and operate a transportation business with 58 trucks and 78 tanker trailers that supports TEG’s retail and wholesale business, all in the Southeastern United States.

This is ARKO’s 23rd acquisition since 2013. It grows ARKO’s retail store base into two new states.

TEG is one of the largest privately held portfolios in the Southeast, with well-known banners including Corner Mart, Dixie Mart, Flash Market, Market Express and Rose Mart, stores that have family histories and long-term presence in their communities. The retail segment is comprised of about 135 company-operated convenience stores located throughout South Carolina, North Carolina, Tennessee, Mississippi, Missouri, Louisiana, Alabama and Arkansas. Many of the stores include well-known food offerings.

Since 2013, ARKO’s growth strategy has transformed the company from about 200 stores in seven states into one of the largest convenience store operators in the United States, with over 1,500 company-operated convenience stores. ARKO brands include Fas Mart, Scotchman, Village Pantry and many others.

The total purchase price for the transaction was approximately $370 million plus the value of inventory, of which $50 million is deferred, payable in two annual payments of $25 million on the first and second anniversaries of the closing, which ARKO may elect to pay in either cash or, subject to certain conditions, shares of ARKO’s common stock.

ARKO financed from its own sources approximately $90 million of the non-deferred consideration including the value of inventory and other closing adjustments. The remaining approximately $258 million was funded by funds managed by Oak Street, a Division of Blue Owl Capital, as part of the existing $1.15 billion agreement between the company and Oak Street, according to which Oak Street acquired the majority of the real estate assets of TEG substantially concurrently with the closing of the transaction. The company now leases these real estate assets from Oak Street.

In December, ARKO acquired WTG Fuels Holdings, the owner of Uncle’s Convenience Stores and GASCARD fleet fueling operations, for $140.4 million plus the value of inventory at closing.

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