Arko launches US$210m IPO to spin off wholesale fuel
Arko moved ahead with plans to split itself in two on Tuesday by launching a US$210m Nasdaq IPO of its Arko Petroleum wholesale fuel division.
UBS, Raymond James and Stifel are joint bookrunners on the marketing of 10.5m new shares at US$18–$20, with pricing expected after the market close next Wednesday, February 11.
The convenience store operator parent’s shares rose 11.8% on Tuesday to US$6.26 following the deal launch, lifting Arko's equity market capitalisation to roughly US$730m.
Arko Petroleum, which supplies gasoline to customers in more than 30 states, to third parties and to Arko itself, is targeting a US$910m market capitalisation on the IPO.
The valuation gap underscores the strategic logic of carving out Arko's steadier wholesale fuel operations from its more volatile convenience store business.
At launch, Arko Petroleum estimated it generated Q4 and full-year 2025 adjusted Ebitda of US$35.4m–$38.4m and US$142m–$145m, relatively flat to the US$35.5m and US$139.2m it generated in the comparable year-ago periods. The subsidiary sold less fuel year on year but maintained profitability.
Arko Petroleum is using the IPO proceeds to pay down a portion of the US$380.8m of borrowings outstanding on its revolving credit facility, reducing net leverage to 1.2 times Ebitda.
The parent will see its ownership stake diluted to 76.9% but continues to view acquisitions as central to the standalone unit's strategy.
“Our growth strategy includes the acquisition of other companies, contracts and assets that either complement or expand our existing business,” Akro Petroleum outlined in the IPO filing.
Arko retains flexibility to spin off the remaining stake retained in Arko Petroleum to shareholders 180 days after the IPO or to sell down its position in the open market.