ARKO Petroleum closes USPP deal, adding 400 wholesale sites
The fuel distributor adds around 280 million gallons of annual volume, two pipeline-connected terminals and a transport fleet, while expecting about $30 million in annualized adjusted EBITDA.
ARKO Petroleum Corp. (APC) has completed its acquisition of the business of U.S. Petroleum Partners (USPP), a vertically integrated fuel supply and distribution platform serving the Great Lakes region. The deal, closed on November 10, adds approximately 280 million gallons of annual fuel volume and around 400 wholesale locations, bringing APC’s network to about 2,500 sites.
The purchase price comprises approximately $200 million in cash plus the value of inventory, funded through existing credit lines, and about 2.0 million APC shares, valued at roughly $30 million, held in escrow.
USPP brings two fuel terminals in Novi, Michigan, and Toledo, Ohio, connected to the Buckeye Pipeline system, as well as a vehicle fleet that transports over 80% of its distributed volumes. The acquisition represents a roughly 14% increase in APC’s trailing twelve-month fuel volumes.
“USPP’s scale and infrastructure expand our presence across the fuel value chain, strengthen our predominantly fixed-margin and fee-based business model and create opportunities to increase terminal utilization, improve transportation efficiency and capture additional margin,” said Arie Kotler, Chairman, President and CEO of APC.
The company expects the acquired business to contribute about $30 million in annualized adjusted EBITDA, with pro forma net debt to adjusted EBITDA of 3.0x to 3.5x, within its previously communicated range.
APC, a subsidiary of ARKO Corp., supplies about 2.2 billion gallons of fuel annually to around 3,900 locations across more than 30 states and the District of Columbia.
