ARKO Expects to Close USPP Deal in Fourth Quarter, Add 280 Million Gallons a Year
Key Facts
ARKO Petroleum said it continues to work toward completing its acquisition of U.S. Petroleum Partners’ business and expects the deal to close in the fourth quarter of fiscal 2026. The company estimates the transaction will add about 280 million gallons of fuel a year, equivalent to about 14% of the fuel volume it handled in the 12 months ended September 30, 2026. The volume will span about 400 dealer locations, according to the company’s third-quarter results statement. ARKO also expects the acquired business to contribute about $30 million in annual adjusted earnings before interest, taxes, depreciation and amortization. The company said the acquisition “is expected to be accretive to earnings,” while supporting estimated cash flow.
ARKO entered into an asset purchase agreement on August 4, 2026, to acquire USPP’s business, an integrated fuel supply and distribution platform serving customers in the Great Lakes region. The deal adds distribution locations and assets that support fuel movement, expanding the company’s presence in the region. The assets include fuel terminals in Novi, Michigan, and Toledo, Ohio, both connected to the Buckeye Pipeline System. They also include a fleet of more than 50 trucks and trailers. Together with the dealer locations, these assets represent a broader operating footprint than simply adding fuel volume to the company’s business.
The consideration at closing includes $205 million in cash, plus the value of inventory, according to ARKO’s statement. The company will also issue $30 million in Class A common stock, which will be placed in escrow when the deal closes. Its release will depend on the seller meeting financial targets based on adjusted earnings before interest, taxes, depreciation and amortization. The targets will be measured over the first four full quarters after closing. The consideration structure therefore combines a cash payment, inventory value and shares contingent on subsequent financial performance.
The deal comes as third-quarter results showed APC net income rising to $13.3 million, compared with $10.1 million in the same quarter of 2025. Adjusted earnings before interest, taxes, depreciation and amortization rose to $41.0 million for the quarter, from $37.4 million a year earlier. For the nine months ended September 30, 2026, adjusted earnings totaled $117.1 million, compared with $106.6 million in the same period of 2025. These figures reflect performance in completed periods, while USPP’s contribution remains an annual estimate contingent on completing the acquisition. The company raised its 2026 adjusted earnings forecast to a range of $156 million to $157 million, based on year-to-date performance, its outlook for the rest of the year and the expected closing of the deal.
Chief Executive Ari Kottler described the agreement when it was announced as APC’s first potential acquisition since its initial public offering earlier in the year. The company said at the time that its balance sheet and liquidity were positioned to pursue accretive acquisition opportunities. ARKO estimated that adding more than 400 wholesale locations could expand its network to more than 2,500 locations after the deal closes. It also said net debt to adjusted earnings before interest, taxes, depreciation and amortization could reach between 3.0 and 3.5 times after the acquisition, within the previously announced leverage range of 3.0 to 4.0 times. The company said the cash portion could be funded through its existing credit facilities.
The expected closing remains subject to customary closing conditions, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. ARKO said there is no certainty the deal will be completed, despite expecting it to close in the fourth quarter of fiscal 2026. In market trading, APC shares closed at $14.77 on November 5, 2026, according to EL7 data. The front-month NYMEX RBOB futures contract settled at $2.7678 a gallon on November 6; this is a futures settlement, not a price at the fuel pump. The company had scheduled a call to discuss its third-quarter results for 5 p.m. Eastern time on November 4, 2026.