Why This Matters to Distributors: ARKO Petroleum is expanding its wholesale fuel business through an acquisition that adds approximately 400 locations, two fuel terminals and transportation assets. The transaction increases annual fuel volume by about 14% and strengthens the company’s control over storage and delivery operations. The deal illustrates how distributors are using acquisitions to expand geographic coverage, increase purchasing volume, and bring more transportation and logistics services into their operations.
ARKO Petroleum Corp. has completed a $230 million acquisition of U.S. Petroleum Partners, adding approximately 400 wholesale fuel locations and 280 million gallons in annual distribution volume as the company expands its operations in the Great Lakes region.
The Richmond, Virginia-based distributor announced Nov. 11 that it completed the transaction a day earlier. The purchase includes approximately $200 million in cash, excluding inventory, and about $30 million in company stock. The acquisition expands ARKO’s wholesale network to approximately 2,500 locations.
The deal also adds two fuel terminals in Novi, Michigan, and Toledo, Ohio, along with transportation assets that handle more than 80% of U.S. Petroleum Partners’ fuel deliveries.
Both terminals are connected to the Buckeye Pipeline system, giving ARKO additional access to fuel storage and transportation infrastructure in the Midwest.
The acquisition increases ARKO’s annual wholesale fuel volume by approximately 14% and expands its ability to manage fuel purchasing, storage, transportation, and delivery.
“The closing of the USPP acquisition represents a meaningful step-up in APC’s scale, earnings power and long-term growth profile,” said Arie Kotler, chairman, president, and CEO of ARKO Petroleum.
U.S. Petroleum Partners supplies fuel to independent dealers and other wholesale customers throughout the Great Lakes region. Its operations include fuel distribution, terminal management, and transportation services.
The addition of approximately 400 wholesale locations expands ARKO’s customer base and increases its purchasing volume. The company expects the larger network to strengthen supplier relationships and create opportunities to reduce operating costs.
The two acquired terminals provide additional storage and distribution capacity in Michigan and Ohio. Their connections to the Buckeye Pipeline system allow fuel to move through established regional transportation infrastructure.
The terminals also give ARKO opportunities to generate revenue from fuel storage and handling services, extending its business beyond wholesale fuel supply.
The acquired transportation assets are another significant part of the transaction. They handle more than 80% of U.S. Petroleum Partners’ distributed fuel volume, giving ARKO greater control over deliveries to wholesale customers.
ARKO expects to improve transportation efficiency by coordinating fuel supply, terminal operations, and deliveries across its expanded network.
The company also expects the acquisition to support additional expansion through potential purchases of other regional fuel distributors.
Kotler said ARKO plans to work with the U.S. Petroleum Partners management team to evaluate acquisition opportunities already under consideration.
The transaction follows an agreement announced in August to acquire all of U.S. Petroleum Partners’ business assets.
Under the completed deal, ARKO paid approximately $200 million in cash, excluding inventory, and issued about 2 million shares of Class A common stock valued at approximately $30 million.
The shares will be held in escrow, with their release tied to the acquired business’s financial performance during the 12 months ending Dec. 31, 2027. Additional payments could be required if the business exceeds specified financial targets.
ARKO financed the cash portion of the acquisition through existing credit arrangements.
The company expects the acquired business to generate approximately $30 million annually in earnings before interest, taxes, depreciation, and amortization, excluding certain expenses. The estimate is not a projection of net income.
The acquisition expands ARKO Petroleum’s existing wholesale fuel business, which supplies independent dealers, commercial fleets, and retail fuel locations across more than 30 states and Washington, D.C.
As of Sept. 30, ARKO supplied fuel to 2,124 independent dealer locations and 1,016 retail locations operated by its parent company. It also operated 294 company-owned and third-party unattended fueling locations serving commercial fleet customers.
The company’s operations include wholesale fuel distribution, fleet fueling programs and services for retail fuel operators.
The U.S. Petroleum Partners acquisition strengthens ARKO’s presence in the Midwest and expands its ability to manage multiple stages of fuel distribution, from purchasing and storage to transportation and delivery.
The additional infrastructure could allow ARKO to serve more customers while reducing its reliance on outside transportation and terminal providers.
The transaction also reflects continued consolidation in fuel distribution, where larger operators are acquiring regional suppliers to expand their customer networks, increase purchasing volume and add transportation and storage capacity.
For ARKO, the acquisition provides an immediate increase in wholesale fuel volume and a larger presence in the Great Lakes market. Its next challenge will be integrating the acquired terminals, transportation operations and customer relationships while pursuing additional growth opportunities.
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