Slide 1: Investor Presentation October 2020
INVESTOR PRESENTATION OCTOBER 2020 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This investor presentation (“Investor Presentation”) and any oral statements made in connection with this Investor Presentation are for informational purposes only and do not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt o
Slide 3: Disclaimer: Forward Looking Statements
Disclaimer Forward Looking Statements These materials include “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the businesses of ARKO Corp., Haymaker, Arko and GPM
Slide 4: Other Information
Other Information Parties Involved in the Transaction Prior to the closing of the business combination, Arko Holdings Ltd., a holding company, owns a majority of the outstanding equity of GPM Investments, LLC, which is the entity responsible for operating the business described in this presentation.
Slide 5: Today's Participants
Today’s Participants ARKO TEAM HAYMAKER TEAM ARIE KOTLER Founder, Director, CEO & President DON BASSELL CFO Acquired GPM Investments, LLC in 2011 at which time it operated and supplied 320 sites Seasoned executive experienced in international financial markets and publicly-traded companies/entities
Slide 6: Why Haymaker Loves ARKO
Why Haymaker Loves ARKO 1 Leader in the Highly Attractive Convenience Store Sector 2 Successful, Differentiated Strategy Embracing Community C-Store Brands 3 Demonstrated History of Rapid, High-ROI Growth Led by Reputation as an Acquiror of Choice 4 Significant Embedded Growth via Empire Acquisition
Slide 7: Transaction Summary
Transaction Summary Note: Transaction summary includes the acquisition of the Empire Petroleum business; assumes no Haymaker shareholder redemptions. Adjusted EBITDA is calculated as EBITDA further adjusted by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, o
Slide 8: Transaction Summary (Cont'd)
Transaction Summary (Cont’d) Note: Transaction summary includes the acquisition of the Empire Petroleum business; assumes no Haymaker shareholder redemptions. 1.0 million founder shares have been cancelled; 4.0 million founder shares will only be issued upon achieving the following milestones and ar
Slide 9: Competitive Differentiators: Unique Value Proposition
Competitive Differentiators: Unique Value Proposition One of the largest and most active consolidators in the convenience store industry with a proven track record of successful integration and exceptional return on capital Unique focus on secondary and tertiary markets with differentiated approach
Slide 10: World-Class Investor Base Rolling 100%
World-Class Investor Base Rolling 100% Adjusted EBITDA is calculated as EBITDA further adjusted by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. Pro forma Adjusted EBITDA gives effect to acqu
Slide 11: Rapidly Growing Leader in U.S. C-Store Industry
RAPIDLY GROWING LEADER IN U.S. C-STORE INDUSTRY
Slide 12: ARKO: A Rapidly Growing Leader in the U.S. Convenience Store Industry
ARKO: A Rapidly Growing Leader in the U.S. Convenience Store Industry According to CSP’s Top 202 Convenience Stores 2020; includes only company-operated locations. Reflects ARKO’s store count as of 6/30/20 and Empire’s store count as of 10/6/20. Includes full year contribution of Empire. Adjusted EB
Slide 13: Entrenched, Local Brands Plus Benefits of Participation in Large Network
Entrenched, Local Brands Plus Benefits of Participation in Large Network ~48 Years Average Local Brand History ROI-Focused Acquiror of Choice Differentiated Strategy Preserves Long-Established Community Brand Equity Centralized Procurement and Merchandising Leverage Network Scale Optimized Purchasin
Slide 14: Multi-Faceted Growth Strategy
Multi-Faceted Growth Strategy Highly fragmented U.S. convenience store industry Well-developed acquisition and integration capabilities Ability to acquire both small and large chains; ARKO reviews all opportunities Actionable pipeline of opportunities In-house M&A team performs in-depth reviews of ~
Slide 15: Acquiror-of-Choice in Highly Fragmented Industry
Acquiror-of-Choice in Highly Fragmented Industry with a Long Runway of Opportunities Ahead National Association of Convenience Stores (“NACS”) 2018 NACS State of the Industry Report. Data from CSP’s Top 202 Convenience Stores 2020. Reflects ARKO’s store count as of 6/30/20 and Empire’s store count a
Slide 16: Dedicated M&A Team with Well-Developed Diligence and Integration Capabilities
Dedicated M&A Team with Well-Developed Target Diligence, Transaction Execution, and Integration Capabilities Sample size based on 14 transactions completed before 2019. Gas Mart, Road Ranger, Arey Oil, and Hurst Harvey stores rebranded post-closing under Company’s existing brands. Includes Broyles H
Slide 17: Exceptional Return on Capital: Sustained Price Discipline
Exceptional Return on Capital: Sustained Price Discipline Augmented by Significant Synergy Opportunities ARKO has maintained purchase price discipline over time and focused intently on capturing cost savings and synergies post-transaction. Thorough diligence on the front end has been key to avoid mi
Slide 18: Capturing Synergies Has and Will Continue to Create Substantial Value
Capturing Synergies Has and Will Continue to Create Substantial Value HURST HARVEY VPS – SOUTHEAST DIVISION AREY OIL Fuel Margin In-Store Margins(1) Store-Level EBITDA 2.8x Reduction 0.6x Reduction MULTIPLE REDUCTION AS SYNERGIES ARE REALIZED 2.4x Reduction +10.7¢ +3.6¢ +3.9¢ +9.8% (0.5%)(2) 4.2% +9
Slide 19: Roughly Half of Existing Stores Are Candidates for Store Remodel Program
Roughly Half of Existing Stores Are Candidates for High Return Store Remodel Program Will include select raze & rebuilds. Following significant acquisition growth, ARKO is re-investing in the in-store experience with numerous initiatives to drive sales and enhance returns Significant, embedded growt
Slide 20: Remodeling Efforts in the Past Have Generated Exceptional Returns
Remodeling Efforts in the Past Have Generated Exceptional Returns Note: ROI defined as EBITDA lift divided by total investment. Follows a three month re-opening period. Store #57 located in Quinton, Virginia. STORE 27 – “SOFT” REMODEL STORE 33 – “HARD” REMODEL STORE 57 – RAZE & REBUILD Investment: $
Slide 21: Continued Enhancement of Product Offering and Customer Engagement
Continued Enhancement of Product Offering and Customer Engagement ARKO also operates gaming machines at 12 sites in Illinois. GAMING INTRODUCTION Machines installed at 65 Virginia stores play beginning July 1, 2020(1) PRIVATE LABEL EXPANSION & ESSENTIAL ITEMS High margin snacks and packaged beverage
Slide 22: Welcoming, Attractive In-Store Presentation
Welcoming, Attractive In-Store Presentation
Slide 23: Current Business Mix is Diversified and Stable
Current Business Mix is Diversified and Stable, Magnified by Strategic Empire Petroleum Combination Note: Figures on pie chart do not add to 100% due to rounding. Reflects ARKO’s store count as of 6/30/20 and Empire’s store count as of 10/6/20. Based on Empire’s 2019 financials. ARKO STANDALONE BUSI
Slide 24: Empire Petroleum: Highly Strategic Combination
Empire Petroleum: Highly Strategic Combination that Meaningfully Increases the Company’s Scale Empire store count at closing (as of 10/6/20). Per management estimates; super-jobbers defined as fuel distributors with volumes greater than 1 billion gallons annually and significant scale with multiple
Slide 25: Financial Overview
FINANCIAL OVERVIEW
Slide 26: Strong Track Record of Growth Projected to Continue
Strong Track Record of Growth Projected to Continue Adjusted EBITDA is calculated as EBITDA further adjusted by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. Pro forma Adjusted EBITDA gives e
Slide 27: High Level of Confidence in 2020E Projections
High Level of Confidence in 2020E Projections Adjusted EBITDA is calculated as EBITDA further adjusted by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. Management estimate based on preliminar
Slide 28: EBITDA Bridge 2019-2020
EBITDA Bridge 2019-2020 Adjusted EBITDA is calculated as EBITDA further adjusted by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. (10.8%) 9.4% $11.3 88.5% Fuel Gallons Sales Growth In-Store S
Slide 29: EBITDA Bridge 2020-2021
EBITDA Bridge 2020-2021 Note: Includes $3.0 million of public company expenses. Adjusted EBITDA is calculated as EBITDA further adjusted by excluding the gain or loss on disposal of assets, impairment charges, acquisition costs, other non-cash items, and other unusual or non-recurring charges. Pro f
Slide 30: Valuation Perspective
VALUATION PERSPECTIVE || tine, Perfect Harvest Coffee Co. ail - Shckese . Artisanal S. Brew, a » Flavor Tb Smooth
Slide 31: Publicly Traded Peer Analysis
2016-2019 RETURN ON INCREMENTAL INVESTED CAPITAL(5) NET DEBT / 2020E PRO FORMA ADJ. EBITDA(4) Publicly Traded Peer Analysis (3)Median multiple of ten most recent publicly disclosed U.S. transactions exceeding $1 billion (excluding ARKO related transactions). Excludes capital leases. Incremental EBIT
Slide 32: Publicly Disclosed M&A Comparable Transactions
Publicly Disclosed M&A Comparable Transactions Acquirer Target Date Deal Size ($MM) 4/20/18 $2,150 2/13/19 $1,075 $2,100 7/31/19 MEDIAN: 12.2X 1/23/18 $3,305 9/30/14 8/29/14 6/28/17 $4,278 $1,700 $2,874 $2,098 $1,600 12/22/17 PUBLICLY DISCLOSED EV / EBITDA MULTIPLES(1) 3/16/15 Source: Public filings
Slide 33: Appendix 1: Industry Overview
APPENDIX 1: INDUSTRY OVERVIEW
Slide 34: Large, Growing, Recession-Resistant Industry
Large, Growing, Recession-Resistant Industry U.S. IN-STORE C-STORE SALES VS. U.S. CONSUMPTION INDEX Industry has grown at a 3.4% CAGR over the last 12 years U.S. CONVENIENCE STORE IN-STORE SALES OVER TIME ($ in billions) ATTRACTIVE INDUSTRY DYNAMICS: Strong fundamentals Large, mature industry Consis
Slide 35: Adjusting to COVID-19's Impact on Convenience Store Channel
Adjusting to COVID-19’s Impact on Convenience Store Channel Convenience stores were designated as essential businesses Decline in fuel volumes due to unprecedented demand erosion was more than offset by historically high fuel margins Simultaneously, inside sales benefitted from shifting consumer beh
Slide 36: Solid Performance Amidst Changing Industry Dynamics
Solid Performance Amidst Changing Industry Dynamics Source: NACS; excludes three vehicles with MSRPs of $100,000 or more. Source: Office of Energy Efficiency & Renewable Energy. Source: ICF Strategic Consulting. (4)The Electric Vehicle World Sales Database. (5)Source: Equity research published by Ra
Slide 37: Appendix 2: Supplementary Company Information
APPENDIX 2: SUPPLEMENTARY COMPANY INFORMATION
Slide 38: Team with Talent and Track Record to Execute Growth Plan
Team with Talent and Track Record to Execute Growth Plan Other Senior Management Experienced individuals covering operations, finance, marketing, IT, merchandising, and M&A diligence and integration 20-40 YEARS EXPERIENCE ARIE KOTLER Founder, Director, CEO & President Acquired GPM Investments, LLC i
Slide 39: Haymaker's View: Compelling Transaction, Attractive End Market
Haymaker’s View: Compelling Transaction, Attractive End Market, Proven Operator, Acquiror & Differentiated Market Leader ARKO HAS A CONSISTENT RECORD OF DELIVERING EXCEPTIONAL GROWTH FOR ITS INVESTORS ~29% adjusted EBITDA(1) CAGR from 2016 to 2020E (2020E adjusted EBITDA of ~$145-150 million) Store
Slide 40: Industry Continues to Experience Meaningful Consolidation Activity
Industry Continues to Experience Meaningful Consolidation Activity Source: Raymond James database. Note: Includes U.S. convenience store transactions, including acquisitions of dealer-operated sites. Excludes sale-leaseback transactions. Includes 3,900 store acquisition of Speedway by 7-Eleven. 24 3
Slide 41: Diversified Community Brands with Regional Footprints
Diversified Community Brands with Regional Footprints Note: Store count as of 6/1/20; excludes nine Dunkin’ locations, two standalone Subway locations, as well as 36 additional stores carrying banners with less than ten locations across network including one banner acquired in 2019. Excludes 84 reta
Slide 42: ARKO Representative Site Photos
ARKO Represe ive Site Photos GPM Llu Haymaker Acquisition
Slide 43: ARKO Representative Site Photos
ARKO ve Site Photos GPM Llu Haymaker Acquisition
Slide 44: Appendix 3: Supplementary Financial Information
APPENDIX 3: SUPPLEMENTARY FINANCIAL INFORMATION
Slide 45: Pro Forma Capitalization
Pro Forma Capitalization Total capacity of up to $140 million. Current availability of $100 million with the option to add an accordion facility of $200 million. Cash contributed to pro forma balance sheet comprised of $406 million of cash in Haymaker trust account, reduced by $100 million to fund a
Slide 46: Debt Schedule
Debt Schedule Until this loan is fully repaid, 98% of the outstanding principal amount of this loan is secured by U.S. Treasury or other investment grade securities. Facility Principal Interest Rate Prepayment Penalty Amortization Covenants Issue Date Maturity Estimated at Close As of 6/30/20 GPM In
Slide 47: Reconciliation of Arko Holdings GAAP Net Income to Adjusted EBITDA
Reconciliation of Arko Holdings, Ltd. GAAP Net Income to Adjusted EBITDA Note: See footnotes on following page.
Slide 48: Reconciliation of Arko Holdings GAAP Net Income to Adjusted EBITDA (Cont'd)
Reconciliation of Arko Holdings, Ltd. GAAP Net Income to Adjusted EBITDA (Cont’d) Eliminates the non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized exceeds (or is less than) our cash rent payments. The GAAP rent expense adjustment can vary depending on the
Slide 49: Adjusted EBITDA Reconciliation: Arko Holdings Ltd. to ARKO
Adjusted EBITDA Reconciliation: Arko Holdings Ltd. to ARKO
Slide 50: Significant Community Brand Equity Across Expansive Store Portfolio
Significant Community Brand Equity Across Expansive Store Portfolio