Haymaker merges with Israeli co Arko Holdings

Arik Kotler
Arik Kotler

After the deal is completed, Arko CEO Arie Kotler will be the largest shareholder in Haymaker, which will dual list on the TASE.

Israeli company Arko Holdings Ltd. (TASE: ARKO) has announced that it is merging with US company Haymaker Acquisition (Nasdaq: HYAC). The two companies have signed a Letter of Intent for a 'business combination.'

According to the Letter of Intent, Haymaker will become full owner of the rights of Arko and its unit GPM, of which Arko holds a 68% stake. GPM operates convenience stores and gas stations in the US. According to the terms of the deal, GPM will merge within Haymaker at a company valuation of $1 billion. In addition, subject to court approval, the company plans issuing a dividend above its original commitment.

Haymaker will pay $200 million including up to $150 million to Arko and up to $50 million to GPM's minority shareholders with the balance in Haymaker shares at $10 per share.

After completion of the deal, Arko and GPM CEO Arie Kotler will be the largest shareholder in the merged company. Haymaker will continue to be traded on Nasdaq. Arko shares will initially continue to be traded on the Tel Aviv Stock Exchange, but the stock will eventually be delisted. 

Arko's shares had fallen 57% since the start of 2020 and its market cap had shrunk to NIS 602 million. But following the report today, Arko's share price jumped 80%.

Kotler said, : "I am very excited about this combination. We have a demonstrated history of profitable growth and a track record of executing consolidation opportunities. Combining with Haymaker as a Nasdaq-listed, pure-play operator of convenience stores greatly enhances our ability to execute our growth strategy in a large, growing, recession resistant industry, while driving value for our combined shareholders. The deal is expected to create value for Arko and GPM at four times higher than Arko is trading today.

Published by Globes, Israel business news - en.globes.co.il - on July 13, 2020

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