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MECHANICSVILLE, Va. -- GPM Investments LLC, operator of 146 Fas Mart and Shore Stop locations, signed an agreement to acquire Sweet Oil Co., -- a privately-owned jobber that supplies more than 70 million gallons of gasoline annually -- for $50.85 million.
The volume is sold through 74 locations under the retail banner Uncle Willies in Delaware, Maryland, Virginia, New Jersey and Pennsylvania, seven of which are operated under management agreements; the rest operate under supply agreements that will be assigned to GPM at closing, according to Fas Mart executives.
The agreement is subject to due diligence contingencies, in addition, GPM, a wholly-owned subsidiary of Israeli company Gmul Energy Ltd., expects to close the transaction in November.
Under terms of the transaction, GPM will have the right to purchase the 23 sites owned by Newark, Del.-based Sweet Oil and the right to purchase improvements on five sites that are ground leases. GPM will assume those ground leases and leases for four other sites where Sweet Oil is a tenant, as well as assume 23 leases where the company leases or subleases sites to third-party dealers.
The deal is being financed by a sale and leaseback agreement between GPM and a real estate investment trust (REIT), for approximately $40.5 million, whereby the REIT will purchase the real estate and lease it back to GPM for a 15-year term, according to Dave McComas, president and CEO of GPM. Other financing will include 18-month seller financing in the amount of $5 million, bank financing of $6 million and $2.4 million in equity from GPM.
According to management, GPM plans to continue to operate Sweet Oil’s dealer network in compliance with the contracts it will be purchasing, and intends to hire certain unnamed personnel from Sweet Oil as well.
In addition to its 146-stores, GPM Investments also supplies petroleum products to a network of 61 independent third-party dealers. The company currently has operations in Virginia, Delaware, Maryland, North Carolina and Connecticut.