JERUSALEM, July 13 (Reuters) - Haymaker Acquisition Corp II has agreed to acquire Israel's Arko Holdings 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)