United States securities and exchange commission logo
October 9, 2020
Christopher Bradley
Chief Financial Officer
ARKO Corp.
650 Fifth Avenue, Floor 10
New York, NY 10019
Re: ARKO Corp.
Registration
Statement on Form S-4
Filed September 10,
2020
File No. 333-248711
Dear Mr. Bradley:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Form S-4 filed September 10, 2020
Consideration in the Business Combination, page 31
1. Please revise to
illustrate the amount of cash and shares to be issued under each option,
using the current
number of issued and outstanding Arko Ordinary Shares for purposes of
the Consideration Value
and a hypothetical shareholder.
Risk Factors
Significant changes in current consumption of tobacco..., page 48
2. Please revise to
quantify the approximate percentage of your overall revenues that are
represented by the
products you mention here.
Christopher Bradley
FirstName LastNameChristopher Bradley
ARKO Corp.
Comapany
October NameARKO Corp.
9, 2020
October
Page 2 9, 2020 Page 2
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Information
Unaudited Pro Forma Condensed Consolidated Statement of Operations, page 87
3. You have labeled your adjustment related to income tax expense here
and on page 89 as
3e. However, it appears from your disclosure on page 92 the adjustment
should be labeled
3d. Please revise as appropriate.
4. Please disclose the basis for the tax rate of 25.5% disclosed in note
3.d on page 92 and
how this rate relates to the amounts of the income tax expense
adjustment and combined
pro forma amounts on pages 87 and 89.
Pro Forma Condensed Combined Balance Sheet Adjustments, page 91
5. Please tell us and disclose the basis for the amount of adjustment
2.i.
6. In regard to adjustment 2.j, please disclose the material assumptions
used to determine the
fair value of the put option.
Comparative Share Information, page 95
7. Please tell us your consideration of providing the equivalent pro
forma per share data for
book value and pro forma income (loss) per share related to Arko
Holding Ltd. Refer
to Item 3(f) of Part I.A of Form S-4 and Instruction to paragraph (e)
and (f) for calculation
of equivalent pro forma per share amounts.
The Business Combination
The Background of the Business Combination, page 104
8. In an appropriate place in your disclosure, please elaborate upon
Arko's permitted closing
cash surplus payment to its shareholders, with a view to understanding
why it was
discussed as part of the merger negotiations, the purpose of it and
the final amount
negotiated.
Haymaker's Board of Directors' Reasons for the Approval of the Business
Combination, page
107
9. Where you discuss the attractive, growing convenience store industry
and its resilience to
economic disruptions, clarify what you mean by "recent months" where
you reference
increase in revenues due to Covid-19, considering your quarterly
results for the period
ended June 30, 2020 reflect a decline in revenues relative to the same
period last year.
10. Where you discuss the financial condition, elaborate upon what about
Arko' and GPM's
historical financial results, outlook, financial plan, debt structure
and asset base, as well as
valuations and trading of publicly traded companies and valuations of
precedent merger
and acquisition targets in similar and adjacent sectors caused the
Board to approve the
Business Combination. This comment also applies to the factor that
relates to the terms of
the Business Combination Agreement.
Christopher Bradley
FirstName LastNameChristopher Bradley
ARKO Corp.
Comapany
October NameARKO Corp.
9, 2020
October
Page 3 9, 2020 Page 3
FirstName LastName
Selected Public Company Analysis, page 111
11. Elaborate upon the "certain respects" in which the selected companies
have financial
profiles that were deemed comparable.
Selected M&A Transaction Analysis, page 112
12. Elaborate upon how the EV/EBITDA Multiples presented here were taken
into account by
the Board and what conclusions may be drawn about the instant
transaction relative to the
multiples presented here.
Liquidity and Capital Resources
Operating Activities, page 201
13. Please provide a more robust analysis of the changes in net cash
provided by operating
activities between comparative periods within the periods presented on
pages 201 and
202. Note references to factors such as segment operating income and
working capital
may not provide a sufficient basis to understand how operating cash
actually was affected
between periods. Address the significant drivers underlying all items
cited, particularly in
regard to the cited factors of lower funds received from vendors and
longer payment terms
with key suppliers, and how they impacted operating cash. Refer to
section IV.B.1 of
SEC Release No. 33-8350 for guidance. Additionally, quantify variance
factors cited
pursuant to section 501.04 of the staff s Codification of Financial
Reporting Releases.
Use of Non-GAAP Measures, page 205
14. Amounts for the adjustment for acquisition costs in arriving at the
non-GAAP measure
"adjusted EBITDA" have been incurred in each period presented on page
206. Note (c)
for this adjustment states salaries of employees whose primary job
function is to execute
the company's acquisition strategy and facilitate integration of
acquired operations are
eliminated. Please tell us how adjusting for these salaries complies
with question 100.01
of staff's Compliance and Disclosure Interpretations "Non-GAAP
Financial Measures." In
so doing, tell us the amount of salaries that have been eliminated.
Arko Holdings LTD (Parent Company Only)
Note 1. General, page F-122
15. Please provide the disclosures pursuant to Rule 4-08(e)(3) of
Regulation S-X in regard to
the restricted net assets of Arko.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
Christopher Bradley
ARKO Corp.
October 9, 2020
Page 4
statement.
You may contact Tony Watson at 202-551-3318 or Doug Jones at
202-551-3309 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Mara Ransom at 202-551-3264 with any other questions.
FirstName LastNameChristopher Bradley Sincerely,
Comapany NameARKO Corp.
Division of Corporation
Finance
October 9, 2020 Page 4 Office of Trade &
Services
FirstName LastName