S-4/A 1 d935242ds4a.htm AMENDMENT NO. 3 TO FORM S-4 Amendment No. 3 to Form S-4
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As filed with the Securities and Exchange Commission on November 5, 2020

Registration Statement No. 333-248711

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 3

TO

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

ARKO Corp.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   5412   85-2784337

(Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

650 Fifth Avenue, Floor 10

New York, NY 10019

(212) 616-9600

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Christopher Bradley

Chief Financial Officer and Secretary

650 Fifth Avenue, Floor 10

New York, NY 10019

(212) 616-9600

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Sidney Burke, Esq.

Stephen P. Alicanti, Esq.

DLA Piper LLP (US)

1251 Avenue of the Americas, 27th Floor

New York, NY 10020

(212) 335-4500

 

Steven J. Heyer

Chief Executive Officer

Haymaker Acquisition Corp. II

650 Fifth Avenue, Floor 10

New York, NY 10019

(212) 616-9600

 

Alan I. Annex, Esq.

Joseph A. Herz, Esq.

Greenberg Traurig, LLP

333 S.E. 2nd Avenue

Miami, FL 33131

(305) 579-0500

 

 

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement becomes effective and on completion of the business combination described in the enclosed proxy statement/prospectus.

If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐


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CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of

Securities to be Registered

 

Amount

to be

Registered(1)

 

Proposed

Maximum

Offering Price

per Share

 

Proposed

Maximum

Aggregate

Offering Price

  Amount of
Registration Fee(12)

Common stock(2)(7)

  40,000,000   $10.12   $404,800,000.00(8)   $52,543.04

Common stock(3)(4)(7)

  25,949,349   $6.58   $170,746,716.42(9)   $22,162.92

Warrants(5)(7)

  13,333,333   $1.3104   $17,471,999.56(10)   $2,267.87

Common stock issuable upon exercise of the Warrants(6)(7)

  13,333,333   $11.50   —  (11)   —  

Total

              $76,973.83(13)

 

 

(1)

All securities being registered will be issued by ARKO Corp., a Delaware corporation (“New Parent”). In connection with the business combination described in this registration statement and the enclosed proxy statement/prospectus (the “Business Combination”), (a) Punch US Sub, Inc., a Delaware corporation, will be merged with and into Haymaker Acquisition Corp. II, a Delaware corporation (“Haymaker”), and each outstanding share of Class A common stock of Haymaker, par value $0.0001 per share (“Haymaker Class A Common Stock”), will be converted into the right to receive one share of common stock of New Parent, par value $0.0001 (the “New Parent Common Stock”), and each outstanding warrant of Haymaker, each entitling the holder thereof to purchase one share of Haymaker Class A Common Stock at an exercise price of $11.50 per share (each, a “Haymaker Warrant”), will be converted into the right to receive a warrant to purchase one share of New Parent Common Stock at an exercise price of $11.50 per share (each, a “New Parent Warrant”) and (b) Punch Sub Ltd., a company organized under the laws of the State of Israel, will merge with and into ARKO Holdings Ltd., a company organized under the laws of the State of Israel (“Arko”), with Arko surviving the merger, and the holders of ordinary shares of Arko, par value 0.01 New Israeli Shekel per share (the “Arko Ordinary Shares”), will exchange their Arko Ordinary Shares for shares of New Parent Common Stock, and Arko will become a wholly owned subsidiary of New Parent.

(2)

Consists of shares of New Parent Common Stock issuable in exchange for outstanding shares of Haymaker Class A Common Stock, including shares of Haymaker Class A Common Stock included in outstanding units of Haymaker (“units”), each unit consisting of one share of Haymaker Class A Common Stock and one-third of one Haymaker Warrant. Upon the consummation of the Business Combination, all units will be separated into their component securities, which will be exchanged for equivalent securities of New Parent.

(3)

Consists of shares of New Parent Common Stock issuable in exchange for Arko Ordinary Shares calculated in accordance with the Business Combination Agreement (as defined below), excluding the estimated number of shares to be held by each of Arie Kotler and Morris Willner, and assuming all Arko shareholders elect to receive stock consideration only.

(4)

The actual number of shares of New Parent Common Stock issuable to shareholders of Arko will be determined pursuant to the terms of the Business Combination Agreement and is dependent on the actual elections of the holders of Arko Ordinary Shares. While the exact number of shares of New Parent Common Stock to be issued at the closing of the Business Combination cannot be known as of the filing of this Registration Statement, New Parent believes that, based on the assumptions underlying the calculation of the registration fee (as set forth in footnote (3) above), excluding the estimated number of shares to be held by each of Arie Kotler and Morris Willner, the actual number of shares of New Parent Common Stock issued will not be greater than those set forth in the Calculation of the Registration Fee table.

(5)

Consists of New Parent Warrants issuable in exchange for outstanding Haymaker Warrants, including Haymaker Warrants included in outstanding units.

(6)

Consists of New Parent Common Stock issuable upon exercise of New Parent Warrants. Each New Parent warrant will entitle the warrant holder to purchase one share of New Parent Common Stock at a price of $11.50 per share (subject to adjustment).

(7)

Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(8)

Pursuant to Rules 457(c) and 457(f)(1) under the Securities Act of 1933, as amended (the “Securities Act”), and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is equal to the product obtained by multiplying $10.12, which represents the average of the high and low prices of shares of Haymaker Class A Common Stock on the Nasdaq Capital Market on September 4, 2020, by (a) 40,000,000, the estimated number of shares of Haymaker Class A Common Stock that will be outstanding immediately prior to the closing of the Business Combination (including shares of Haymaker Class A Common Stock that may be redeemed pursuant to the terms of Haymaker’s amended and restated certificate of incorporation and the shares of Haymaker Class A Common Stock included in the units).

(9)

Pursuant to Rules 457(c) and 457(f)(1) under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is equal to the product obtained by multiplying (a) 22.23 New Israeli Shekels , or $6.58 (based on the exchange rate reported by the Bank of Israel on September 7, 2020), which represents the average of the high and low prices of the Arko Ordinary Shares, as reported on the Tel Aviv Stock Exchange on September 7, 2020, by (b) 25,949,349, the estimated number of shares of New Parent Common Stock issuable in respect of the Arko Ordinary Shares outstanding immediately prior to the closing of the Business Combination, excluding the estimated number of shares to be held by each of Arie Kotler and Morris Willner, and assuming all Arko shareholders elect to receive stock consideration only.

(10)

Pursuant to Rules 457(c) and 457(f)(1) under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is equal to the product obtained by multiplying $1.3104, which represents the average of the high and low prices of Haymaker Warrants on the Nasdaq Capital Market on September 4, 2020, by (a) 13,333,333, the estimated maximum number of Haymaker Warrants that will be outstanding and registered by New Parent immediately prior to the closing of the Business Combination.

(11)

No separate registration fee required pursuant to Rule 457(g) under the Securities Act of 1933, as amended.

(12)

Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $129.80 per $1,000,000 of the proposed maximum aggregate offering price.

(13)

Previously paid in connection with the initial filing of this registration statement on September 10, 2020.

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. These securities described herein may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROXY STATEMENT AND PROSPECTUS

SUBJECT TO COMPLETION, DATED NOVEMBER 5, 2020

LETTER TO STOCKHOLDERS OF HAYMAKER ACQUISITION CORP. II

Haymaker Acquisition Corp. II

650 Fifth Avenue, Floor 10

New York, NY 10019

Dear Haymaker Acquisition Corp. II Stockholders:

Haymaker Acquisition Corp. II, a Delaware corporation (“Haymaker”), ARKO Corp., a Delaware corporation (together with, unless the context otherwise requires, its consolidated subsidiaries for periods following the Business Combination (“New Parent”), Punch US Sub, Inc., a Delaware corporation (“Merger Sub I”), Punch Sub Ltd., a company organized under the laws of the State of Israel (“Merger Sub II”), and ARKO Holdings Ltd., a company organized under the laws of the State of Israel (“Arko”), entered into a business combination agreement (the “Business Combination Agreement”) pursuant to which Merger Sub I will merge with and into Haymaker, with Haymaker surviving the merger as a wholly-owned subsidiary of New Parent (the “First Merger”), and then Merger Sub II will merge with and into Arko, with Arko surviving the merger as a wholly-owned subsidiary of New Parent (the “Second Merger,” and collectively with the other transactions described in the Business Combination Agreement and the GPM Equity Purchase Agreement (as defined below), the “Business Combination”). Arko, as a wholly owned subsidiary of New Parent, will maintain a registered office in the State of Israel. The First Merger shall become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware executed in accordance with, and in such form as is required by, the relevant provisions of the Delaware General Corporation Law (the “DGCL”) (such date and time being hereinafter referred to as the “First Effective Time”). The Second Merger shall become effective upon the issuance by the Companies Registrar of the Certificate of Merger for the Second Merger in accordance with Section 323(5) of the Companies Law 5759-1999 of the State of Israel (together with the rules and regulations thereunder, the “ICL”) (such date and time being hereinafter referred to as the “Second Effective Time”).

Contemporaneously with the execution of the Business Combination Agreement, New Parent, Haymaker and each of the entities that are party thereto and listed on Exhibit B thereto (the “GPM Minority Investors”) entered into an equity purchase agreement (the “GPM Equity Purchase Agreement”), pursuant to which, at the closing of the Business Combination, New Parent will purchase, directly or indirectly, from the GPM Minority Investors their equity interests in GPM Investments, LLC (“GPM”) in exchange for shares of common stock of New Parent, par value $0.0001 (“New Parent Common Stock”). As a result of the Business Combination, New Parent will indirectly own 100% of GPM, which operates Arko’s current business.

Each warrant to purchase shares of Haymaker Class A Common Stock is exercisable for one share of Haymaker Class A Common Stock at an exercise price of $11.50, as contemplated under the Haymaker Warrant Agreement (a “Haymaker Warrant”). At the First Effective Time, each Haymaker Warrant that is outstanding immediately prior to the First Effective Time will, pursuant to the terms of that certain warrant agreement, dated June 6, 2019, by and between Haymaker and Continental Stock Transfer & Trust Company, as amended by the warrant assignment, assumption and amendment agreement, dated as of the date of the closing of the Business Combination, by and among Haymaker, New Parent, and Continental Stock Transfer & Trust Company (as so amended, the “Haymaker Warrant Agreement”), cease to represent the right to acquire one share of Haymaker Class A Common Stock and shall be converted in accordance with the terms of such Haymaker Warrant Agreement, at the First Effective Time, into a right to acquire one share of New Parent Common Stock (each, a “New Parent Warrant” and collectively, the “New Parent Warrants”) on substantially the same terms that were in effect immediately prior to the First Effective Time under the terms of the Haymaker Warrant Agreement.

Following the First Effective Time, (i) the Sponsor will automatically forfeit 1,000,000 shares of New Parent Common Stock and 2,000,000 New Parent Warrants, and such shares and warrants will be cancelled and no longer outstanding and (ii) 4,000,000 shares of New Parent Common Stock that would otherwise be issuable to the Sponsor will be deferred (as further described below). Subject to the terms and conditions of the Business Combination Agreement, no more than five business days following the occurrence of Trigger Event 1 (as defined below) or Trigger Event 2 (as defined below), New Parent will issue to the Sponsor (i) 2,000,000 shares


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of New Parent Common Stock in the case of Trigger Event 1, and (ii) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 2 (such shares, the “Deferred Shares”). “Trigger Event 1” will occur on (i) the first day the Required VWAP (as defined below) of the New Parent Common Stock is greater than or equal to $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 5-year anniversary of the closing of the Business Combination. “Trigger Event 2” will occur on (i) the first day the Required VWAP of the New Parent Common Stock is greater than or equal to $15.00 per (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $15.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 7-year anniversary of the closing of the Business Combination. “Required VWAP” means either (A) the 5-day volume weighed average price, if the average daily trading volume during such 5-day period equals or exceeds the average daily trading volume for the 180-day period following the Closing or (B) the 20-day volume weighted average price.

At the Second Effective Time, each ordinary share, par value 0.01 New Israeli Shekel per share, of Arko (all such issued and outstanding shares, including those to be issued in respect of Arko’s restricted stock units, are collectively referred to as the “Arko Ordinary Shares”) issued and outstanding immediately prior to the Second Effective Time will be cancelled and, subject to the terms of the Business Combination Agreement, each holder of Arko Ordinary Shares will receive the following consideration, at such holder’s election:

 

  1.

Option A (Stock Consideration): The number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to the quotient of (i) such holder’s Consideration Value divided by (ii) $10.00.

 

  2.

Option B (Mixed Consideration): (A) a cash amount equal to 10% of such holder’s Consideration Value (the “Cash Option B Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holder’s Cash Option B Amount divided by $8.50.

 

  3.

Option C (Mixed Consideration): (A) a cash amount equal to 20.913% of such holder’s Consideration Value (the “Cash Option C Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holders Cash Option C Amount divided by $8.50.

For purposes of the above calculations, “Consideration Value” for a holder of Arko Ordinary Shares is an amount equal to the product of (a) the number of Arko Ordinary Shares held by such holder immediately prior to the Second Effective Time multiplied by (b) the Company Per Share Value. The “Company Per Share Value” is an amount equal to the quotient of $717,273,400 divided by the total number of issued and outstanding or issuable Arko Ordinary Shares, in each case, as of the Second Effective Time. Up to $150,000,000 of cash consideration will be available to holders of Arko Ordinary Shares (including Key Arko Shareholders) if they all were to select Option C. Notwithstanding the foregoing, after giving effect to the obligations of the Voting Support Shareholders (as defined below) under the Voting Support Agreements (as defined below), in which certain holders of Arko Ordinary Shares have agreed to elect either Option A or Option B, under no circumstance shall the actual aggregate (x) cash consideration exceed $100,045,000 nor (y) shares of New Parent Common Stock to be issued to Arko shareholders exceed 59,957,382 (if the aggregate Cash Consideration is $100,045,000) or 71,727,340 (if the aggregate Cash Consideration is $0). In addition, each holder of Arko Ordinary Shares will be entitled to receive a pro rata payment, in the form of a dividend or additional cash consideration, in respect of cash held by Arko in excess of Arko’s debt, each measured at least five business days before Closing. For more information, see “The Business Combination Agreement—Consideration to be Received in the Business Combination.”

Below is an illustration of what a hypothetical Arko Public Shareholder would receive per Arko Ordinary Share under each merger consideration option, assuming there are issued and outstanding or issuable Arko

 

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Ordinary Shares as of the Second Effective Time equal to 829,698,484 (which represents the number of such shares as of September 10, 2020). In addition to the stock consideration and cash consideration received under each option, the hypothetical Arko Public Shareholder will be entitled to receive a pro rata payment, in the form of a dividend or additional cash consideration, in respect of cash held by Arko in excess of Arko’s debt, each measured at least five business days before Closing. This illustration results in a Company Per Share Value (and a Consideration Value per Arko Ordinary Share) of $0.86, which is calculated as the quotient of $717,273,400 divided by the 829,698,484 shares assumed to be issued and outstanding or issuable Arko Ordinary Shares as of the Second Effective Time.

 

  1.

Option A: The hypothetical Arko Public Shareholder will receive 0.086 shares of New Parent Common Stock per Arko Ordinary Share that he, she, or it holds. The stock consideration is calculated as the quotient of (i) $0.86, the Consideration Value per Arko Ordinary Share for the hypothetical Arko Public Shareholder, divided by (ii) $10.00.

 

  2.

Option B: The hypothetical Arko Public Shareholder will receive 0.076 shares of New Parent Common Stock per Arko Ordinary Share and $0.086 of cash consideration per Arko Ordinary Share that he, she, or it holds. The Cash Option B Amount is $0.086 per Arko Ordinary Share, calculated as 10% of $0.86, the hypothetical Arko Public Shareholder’s Consideration Value per Arko Ordinary Share. The stock consideration under this option is calculated as (i) $0.86, the Consideration Value per Arko Ordinary Share of the hypothetical Arko Public Shareholder, divided by $10.00, minus (ii) such holder’s Cash Option B Amount per Arko Ordinary Share divided by $8.50.

 

  3.

Option C: The hypothetical Arko Public Shareholder will receive 0.065 shares of New Parent Common Stock per Arko Ordinary Share and $0.18 of cash consideration per Arko Ordinary Share that he, she, or it holds. The Cash Option C Amount per Arko Ordinary Share is $0.18, calculated as 20.913% of $0.86, the hypothetical Arko Public Shareholder’s Consideration Value per Arko Ordinary Share. The stock consideration under this option is calculated as (i) $0.86, the Consideration Value per Arko Ordinary Share of the hypothetical Arko Public Shareholder, divided by $10.00, minus (ii) such holder’s Cash Option C Amount per Arko Ordinary Share divided by $8.50.

Haymaker’s units, Haymaker Class A Common Stock and Haymaker Warrants are currently listed on the Nasdaq Capital Market, under the symbols “HYACU,” “HYAC,” and “HYACW,” respectively. Upon the closing of the Business Combination, Haymaker securities are expected to be delisted from Nasdaq. Shares of New Parent Common Stock and New Parent Warrants are expected to trade under the symbols “ARKO” and “ARKOW,” respectively, following the consummation of the Business Combination.

Haymaker is holding a special meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the Business Combination. At the Haymaker special meeting of stockholders, which will be held on December 8, 2020, at 10:00 a.m., Eastern time, virtually at https://www.virtualshareholdermeeting.com/HYAC2020, unless postponed or adjourned to a later date, Haymaker will ask its stockholders to adopt the Business Combination Agreement, thereby approving the Business Combination, and approve the other proposals described in this proxy statement/prospectus. In light of public health concerns regarding the COVID-19 pandemic, the special meeting of stockholders will be held in a virtual meeting format only. You will not be able to physically attend the special meeting.

As described in this proxy statement/prospectus, certain shareholders of Arko are parties to voting support agreements with Haymaker (the “Voting Support Agreements”) whereby such shareholders agreed to, among of things, vote all of their Arko Ordinary Shares in favor of approving the Business Combination and other proposed transactions (together, the “Proposed Transactions”) contemplated by the Business Combination Agreement. Collectively, as of September 10, 2020, these Arko shareholders held approximately 64% of the outstanding Arko Ordinary Shares.

 

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After careful consideration, the respective Haymaker and Arko boards of directors have unanimously approved the Business Combination Agreement and the board of directors of Haymaker has approved the other proposals described in this proxy statement/prospectus, and each of the Haymaker and Arko boards of directors has determined that it is advisable to consummate the Business Combination. The board of directors of Haymaker recommends that its stockholders vote “FOR” the proposals described in this proxy statement/prospectus. When you consider the board of directors’ recommendation of these proposals, you should keep in mind that certain of our directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder.

More information about Haymaker, Arko and the Proposed Transactions is contained in this proxy statement/prospectus. You are urged to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to herein, carefully and in their entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 47 OF THIS PROXY STATEMENT/PROSPECTUS.

On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.

 

                    , 2020   

Sincerely,

 

Steven J. Heyer

Chief Executive Officer and Executive Chairman

This proxy statement/prospectus is dated                 , 2020, and is first being mailed to the stockholders of Haymaker on or about that date.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

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Haymaker Acquisition Corp. II

650 Fifth Avenue, Floor 10

New York, NY 10019

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON DECEMBER 8, 2020

To the Stockholders of Haymaker Acquisition Corp. II:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “special meeting”) of Haymaker Acquisition Corp. II, a Delaware corporation (“Haymaker,” “we,” “our” or “us”), will be held on December 8, 2020, at 10:00 a.m., Eastern time, virtually at https://www.virtualshareholdermeeting.com/HYAC2020. You are cordially invited to virtually attend the special meeting for the following purposes:

 

  1.

The “Business Combination Proposal”—to approve and adopt the Business Combination Agreement, dated as of September 8, 2020 (as it may be amended from time to time, the “Business Combination Agreement”), by and among Haymaker Acquisition Corp. II, a Delaware corporation (“Haymaker”), ARKO Corp., a Delaware corporation (together with, unless the context otherwise requires, its consolidated subsidiaries for periods following the Business Combination “New Parent”), Punch US Sub, Inc., a Delaware corporation (“Merger Sub I”), Punch Sub Ltd., a company organized under the laws of the State of Israel (“Merger Sub II”), and ARKO Holdings Ltd., a company organized under the laws of the State of Israel (“Arko”), and the transactions contemplated thereby (including the First Merger), pursuant to which Merger Sub I will merge with and into Haymaker, with Haymaker surviving the merger as a wholly-owned subsidiary of New Parent (the “First Merger”), and then Merger Sub II will merge with and into Arko, with Arko surviving the merger as a wholly-owned subsidiary of New Parent (the “Second Merger,” and collectively with the other transactions described in the Business Combination Agreement and the GPM Equity Purchase Agreement (as defined below), the “Business Combination”);

 

  2.

The “Lock-Up Agreement Proposal”—to approve and ratify the entry into the Registration Rights and Lock-Up Agreement with the Sponsor, the directors and officers of Haymaker, and the other parties thereto (the “Registration Rights and Lock-Up Agreement”).

 

  3.

The “Incentive Plan Proposal”—to approve and adopt the ARKO Corp. 2020 Incentive Compensation Plan established to be effective after the closing of the Business Combination.

 

  4.

The “Stockholder Adjournment Proposal”—a proposal to authorize the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and voting of proxies if, based on the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Business Combination Proposal or Public Stockholders have elected to redeem an amount of Haymaker Class A Common Stock such that the minimum available cash condition to the closing of the Business Combination would not be satisfied.

Only holders of record of our common stock at the close of business on November 4, 2020 are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

Pursuant to our amended and restated certificate of incorporation, we are providing our Public Stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount on deposit in the trust account which holds the proceeds of our initial public offering as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, upon the consummation of the Business Combination. For illustrative purposes, based on funds in the trust account of approximately $405.0 million on June 30, 2020, the estimated per share redemption price would have been approximately

 

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$10.13. Public Stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal and any of the other proposals presented. A Public Stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its shares with respect to more than an aggregate of 15% of the Public Shares. Holders of our outstanding warrants to purchase shares of our Class A common stock do not have redemption rights with respect to such warrants in connection with the Business Combination. All of the holders of our Class B common stock (“Founder Shares”) have agreed to waive their redemption rights with respect to their Founder Shares and any public shares that they may have acquired during or after our initial public offering in connection with the completion of the Business Combination. The Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the Sponsor owns approximately 20% of our issued and outstanding shares of common stock, consisting of 100% of the Founder Shares.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC, at (800) 662-5200; banks and brokers can call collect at (203) 658-9400.

In light of the ongoing health concerns relating to the COVID-19 pandemic and to best protect the health and welfare of Haymaker’s stockholders and personnel, the special meeting will be held in virtual meeting format only. Stockholders are nevertheless urged to vote their proxies by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted.

 

                    , 2020   

By Order of the Board of Directors,

 

Steven J. Heyer

Chief Executive Officer and Executive Chairman

 

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TABLE OF CONTENTS

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     1  

FREQUENTLY USED TERMS

     1  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

     5  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     20  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ARKO

     40  

SELECTED HISTORICAL FINANCIAL INFORMATION OF HAYMAKER

     41  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     43  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     45  

RISK FACTORS

     47  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     79  

COMPARATIVE SHARE INFORMATION

     98  

THE SPECIAL MEETING OF HAYMAKER STOCKHOLDERS

     100  

PROPOSALS TO BE CONSIDERED BY HAYMAKER’S STOCKHOLDERS: PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     107  

THE BUSINESS COMBINATION

     107  

THE BUSINESS COMBINATION AGREEMENT

     120  

CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION

     134  

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE REDEMPTION AND THE BUSINESS COMBINATION

     138  

PROPOSAL NO. 2—THE LOCK-UP AGREEMENT PROPOSAL

     153  

PROPOSAL NO. 3—THE INCENTIVE PLAN PROPOSAL

     154  

PROPOSAL NO. 4—THE STOCKHOLDER ADJOURNMENT PROPOSAL

     159  

INFORMATION ABOUT ARKO

     160  

MANAGEMENT OF ARKO

     174  

MANAGEMENT OF GPM

     176  

ARKO’S EXECUTIVE COMPENSATION

     178  

ARKO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     189  

CERTAIN ARKO RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     219  

INFORMATION ABOUT HAYMAKER

     221  

HAYMAKER’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     236  

CERTAIN HAYMAKER RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     248  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     251  

DESCRIPTION OF ARKO CORP.’S SECURITIES

     256  

SHARES ELIGIBLE FOR FUTURE SALE

     265  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     267  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     270  

ADDITIONAL INFORMATION

     271  

WHERE YOU CAN FIND MORE INFORMATION

     272  

INDEX TO FINANCIAL INFORMATION

     F-1  

ANNEX A: Business Combination Agreement

     A-1  

ANNEX B: Form of Amended and Restated Certificate of Incorporation

     B-1  

ANNEX C: Form of Bylaws

     C-1  

ANNEX D: Form of Registration Rights and Lock-Up Agreement

     D-1  

ANNEX E: Sponsor Support Agreement

     E-1  

ANNEX F: GPM Equity Purchase Agreement

     F-1  

ANNEX G: ARKO Corp. 2020 Incentive Compensation Plan

     G-1  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Arko Corp., a Delaware corporation (“New Parent”) (File No. 333-248711), constitutes a prospectus of New Parent under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock, par value $0.0001 per share, of New Parent (“New Parent Common Stock”) to be issued if the transactions contemplated by the Business Combination Agreement, including the transactions contemplated by the GPM Equity Purchase Agreement (the “Business Combination”) are consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the special meeting of stockholders of Haymaker Acquisition Corp. II, a Delaware corporation (“Haymaker”), at which Haymaker stockholders will be asked to consider and vote upon a proposal to approve the Business Combination, as described herein, by the approval and adoption of the Business Combination Agreement (as defined below), among other matters.

FREQUENTLY USED TERMS AND CERTAIN ASSUMPTIONS

In this document:

“2020 Plan” means the ARKO Corp. 2020 Incentive Compensation Plan.

“Ares” means Ares Capital Corporation or any of its affiliates, any investment fund solely managed or controlled by any of them, or any affiliate of such investment fund.

“Arko” means ARKO Holdings Ltd., a company organized under the laws of the State of Israel and, unless the context otherwise requires, includes its consolidated subsidiaries. Prior to the closing of the Business Combination, Arko, a holding company, holds a majority of the outstanding equity of GPM, which is the entity responsible for operating the business described under “Information About Arko.” Following the closing of the Business Combination, both Arko and GPM will be indirect wholly-owned subsidiaries of New Parent.

“Arko Public Shareholders” means all Arko shareholders, other than Arie Kotler and Morris Willner, and their respective affiliates.

“Arko Ordinary Shares” means ordinary shares, par value 0.01 New Israeli Shekel per share, of Arko.

“broker non-vote” means the failure of a Haymaker stockholder, who holds its, his or her shares in “street name” through a broker or other nominee, to give voting instructions to such broker or other nominee.

“Business Combination” means the transactions contemplated by the Business Combination Agreement, including the transactions contemplated by the GPM Equity Purchase Agreement.

“Business Combination Agreement” means the business combination agreement, dated as of September 8, 2020, as may be amended from time to time, by and among Haymaker, New Parent, Arko, Merger Sub I, and Merger Sub II.

“Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.

“Cantor” means Cantor Fitzgerald & Co.

“Closing” means the consummation of the Business Combination.

“Closing Date” means the date on which the Closing occurs.

 

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“Code” means the Internal Revenue Code of 1986, as amended.

“DGCL” means the Delaware General Corporation Law.

“Empire” means Empire Petroleum Partners, LLC.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“First Merger” means the merger of Merger Sub I with and into Haymaker, with Haymaker surviving the First Merger.

“Founder Shares” means the shares of Haymaker Class B Common Stock initially purchased by the Sponsor in a private placement in connection with the IPO.

“GAAP” means U.S. generally accepted accounting principles.

“GPM” means GPM Investments, LLC together with all of its subsidiaries. Prior to the closing of the Business Combination, Arko, a holding company, holds a majority of the outstanding equity of GPM, which is the entity responsible for operating the business described under “Information About Arko.” Following the closing of the Business Combination, each of Arko and GPM will be an indirect wholly-owned subsidiary of New Parent.

“GPM Equity Purchase Agreement” means the equity purchase agreement, dated as of September 8, 2020, by and among New Parent, Haymaker and the GPM Minority Investors.

“GPM Minority Investors” means GPM Owner, LLC, GPM Holdings, Inc., GPM Member, LLC, GPM HP SCF Investor, LLC, ARCC Blocker II LLC, CADC Blocker Corp., Ares Centre Street Partnership, L.P., Ares Private Credit Solutions, L.P., Ares PCS Holdings Inc., Ares ND Credit Strategies Fund LLC, Ares Credit Strategies Insurance Dedicated Fund Series Interests of SALI Multi-Series Fund, L.P., Ares SDL Blocker Holdings LLC, Ares SFERS Credit Strategies Fund LLC, Ares Direct Finance I LP and Ares Capital Corporation.

“GPM Petroleum” or “GPMP” means GPM Petroleum LP together with all of its subsidiaries. GPM owns, directly and indirectly, 100% of the general partner of GPMP and 80.7% of the GPMP limited partner units.

“Haymaker” means Haymaker Acquisition Corp. II, a Delaware corporation.

“Haymaker Class A Common Stock” means shares of Class A common stock, par value $0.0001 per share, of Haymaker issued as part of the units sold in the IPO.

“Haymaker Unit” or “unit” means one share of Haymaker Class A common stock and one-third of one Haymaker Warrant.

“Haymaker Warrant Agreement” means the warrant agreement, dated as of June 6, 2019, by and between Haymaker and Continental Stock Transfer & Trust Company, governing Haymaker’s outstanding warrants, to be amended at Closing by that certain warrant assignment, assumption and amendment agreement, by and among Haymaker, New Parent, and Continental Stock Transfer & Trust Company.

“Haymaker Warrants” means warrants to purchase shares of Haymaker Class A Common Stock as contemplated under the Haymaker Warrant Agreement, with each warrant exercisable for one share of Haymaker Class A Common Stock at an exercise price of $11.50.

 

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“Incentive Plan Proposal” means the proposal to approve the adoption of the 2020 Plan.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“IPO” means Haymaker’s initial public offering of units, consummated on June 11, 2019.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

“Key Arko Shareholders” means, collectively, Arie Kotler, KMG Realty LLC, Yahli Group Ltd., Vilna Holding and Morris Willner.

“Merger Sub I” means Punch US Sub, Inc., a Delaware corporation.

“Merger Sub II” means Punch Sub Ltd., a company organized under the laws of the State of Israel.

“Nasdaq” means the NASDAQ Stock Market LLC.

“New Parent” means ARKO Corp., a Delaware corporation, and, unless the context otherwise requires, its consolidated subsidiaries (including Arko and GPM) for periods following the Business Combination.

“New Parent Common Stock” means validly issued, fully paid and nonassessable shares of common stock, par value $0.0001 per share, of New Parent.

“New Parent Private Placement Warrants” means warrants to acquire New Parent Common Stock on substantially equivalent terms and conditions as the Private Placement Warrants.

“New Parent Warrants” means warrants to acquire New Parent Common Stock on substantially equivalent terms and conditions as set forth in the Haymaker Warrants.

“PCAOB” means the Public Company Accounting Oversight Board.

“Private Placement Warrants” means the warrants to purchase shares of Haymaker Class A Common Stock purchased by the Sponsor, Stifel, and Cantor in a private placement in connection with the IPO.

“Proposed Transactions” means the Business Combination and other proposed transactions contemplated by the Business Combination Agreement.

“prospectus” means the prospectus included in the Registration Statement on Form S-4 (Registration No. 333-248711) filed with the SEC.

“Public Stockholders” means the holders of shares of Haymaker Class A Common Stock.

“Public Warrants” means the warrants included in the units sold in the IPO, each of which is exercisable for one share of Haymaker Class A Common Stock, in accordance with its terms.

“Registration Rights and Lock-Up Agreement” means the Registration Rights and Lock-Up Agreement to be entered into by and among New Parent and each of the persons or entities listed on Schedule A thereto.

“SEC” means the U.S. Securities and Exchange Commission.

“Second Merger” means the merger of Merger Sub II with and into Arko, with Arko surviving the Second Merger.

 

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“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Sponsor” means Haymaker Sponsor II LLC, a Delaware limited liability company.

“Sponsor Support Agreement” means the letter agreement, dated as of September 8, 2020, by and between the Sponsor, Arko, and for purposes of Section 6 through Section 12 thereof, Andrew R. Heyer and Steven J. Heyer.

“Stifel” means Stifel, Nicolaus & Company, Incorporated.

“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Placement Warrants.

“Voting Support Agreements” means the voting support agreement, dated as of September 8, 2020, by and among Haymaker, Morris Willner and Vilna Holdings, and the voting support agreement, dated as of September 8, 2020, by and among Haymaker and Arie Kotler, KMG Realty LLC, and Yahli Group Ltd.

Unless otherwise specified, all share calculations assume (i) no exercise of redemption rights by Haymaker’s Public Stockholders; (ii) prior to the consummation of the Business Combination, no inclusion of the 19,333,333 shares of Haymaker Class A Common Stock issuable upon the exercise of 13,333,333 Haymaker Warrants and 6,000,000 Private Placement Warrants; (iii) after the consummation of the Business Combination, no inclusion of the 17,333,333 shares of New Parent Common Stock issuable upon the exercise of 13,333,333 New Parent Warrants and 4,000,000 New Parent Private Placement Warrants; (iv) no inclusion of the 4,000,000 deferred shares of New Parent Common Stock, in the aggregate, that are issuable to the Sponsor upon the occurrence of certain events under the Business Combination Agreement and (v) no inclusion of the                  shares of New Parent Common Stock available for issuance under the 2020 Plan.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting of stockholders, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to Haymaker stockholders. You are urged to read carefully this entire proxy statement/prospectus, including the financial statements and annexes attached hereto and the other documents referred to herein.

Questions and Answers About the Special Meeting of Haymaker’s Stockholders and the Related Proposals

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

Haymaker stockholders are being asked to consider and vote upon the Business Combination Proposal to approve the adoption of the Business Combination Agreement and the Business Combination, among other proposals. This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.

Haymaker has entered into the Business Combination Agreement with New Parent, Merger Sub I, Merger Sub II, and Arko, pursuant to which Merger Sub I will merge with and into Haymaker, with Haymaker surviving the merger as a wholly-owned subsidiary of New Parent (the “First Merger”), and then Merger Sub II will merge with and into Arko, with Arko surviving the merger as a wholly-owned subsidiary of New Parent (the “Second Merger,” and collectively with the other transactions described in the Business Combination Agreement and the GPM Equity Purchase Agreement, the “Business Combination”). A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. Arko, as a wholly owned subsidiary of New Parent, will continue to maintain a registered office in the State of Israel. The First Merger shall become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware executed in accordance with, and in such form as is required, by the relevant provisions of the Delaware General Corporate Law (the “DGCL”) (such date and time being hereinafter referred to as the “First Effective Time”). The Second Merger shall become effective upon the issuance by the Companies Registrar of the Certificate of Merger for the Second Merger in accordance with Section 323(5) of the Companies Law 5759-1999 of the State of Israel (together with the rules and regulations thereunder, the “ICL”) (such date and time being hereinafter referred to as the “Second Effective Time”).

Contemporaneously with the execution of the Business Combination Agreement, New Parent, Haymaker, and the GPM Minority Investors entered into the GPM Equity Purchase Agreement, pursuant to which, at Closing, New Parent shall purchase, directly or indirectly, from the GPM Minority Investors their equity interests in GPM in exchange for shares of common stock of New Parent, par value $0.0001 (“New Parent Common Stock”). As a result of the Business Combination, New Parent will indirectly own 100% of GPM, which operates Arko’s current business.

At the First Effective Time, (a) each outstanding share of Haymaker Class A Common Stock and each outstanding Founder Share will be converted into the right to receive one share of New Parent Common Stock and (b) each Haymaker Warrant that is outstanding immediately prior to the First Effective Time will, pursuant to the terms of Haymaker Warrant Agreement, cease to represent the right to acquire one share of Haymaker Class A Common Stock and shall be converted in accordance with the terms of such Haymaker Warrant Agreement, at the First Effective Time, into a right to acquire one share of New Parent Common Stock (each, a “New Parent Warrant” and collectively, the “New Parent Warrants”) on substantially the same terms that were in effect immediately prior to the First Effective Time under the terms of the Haymaker Warrant Agreement.

Following the First Effective Time, (i) the Sponsor will automatically forfeit 1,000,000 shares of New Parent Common Stock and 2,000,000 New Parent Warrants, and such shares and warrants will be cancelled and no longer outstanding and (ii) 4,000,000 shares of New Parent Common Stock that would otherwise be

 

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issuable to the Sponsor will be deferred (as further described below). Subject to the terms and conditions of the Business Combination Agreement, no more than five business days following the occurrence of Trigger Event 1 (as defined below) or Trigger Event 2 (as defined below), New Parent will issue to the Sponsor (i) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 1, and (ii) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 2 (such shares, the “Deferred Shares”). “Trigger Event 1” will occur on (i) the first day the Required VWAP (as defined below) of the New Parent Common Stock is greater than or equal to $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 5-year anniversary of the closing of the Business Combination. “Trigger Event 2” will occur on (i) the first day the Required VWAP of the New Parent Common Stock is greater than or equal to $15.00 per (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $15.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 7-year anniversary of the closing of the Business Combination. “Required VWAP” means either (A) the 5-day volume weighed average price, if the average daily trading volume during such 5-day period equals or exceeds the average daily trading volume for the 180-day period following the Closing or (B) the 20-day volume weighted average price.

At the Second Effective Time, each ordinary share, par value 0.01 New Israeli Shekel per share, of Arko (all such issued and outstanding shares, including those to be issued in respect of Arko’s restricted stock units, are collectively referred to as the “Arko Ordinary Shares”) issued and outstanding immediately prior to the Second Effective Time will be cancelled and, subject to the terms of the Business Combination Agreement, each holder of Arko Ordinary Shares will receive the following consideration, at such holder’s election:

 

  1.

Option A (Stock Consideration): The number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to the quotient of (i) such holder’s Consideration Value divided by (ii) $10.00.

 

  2.

Option B (Mixed Consideration): (A) a cash amount equal to 10% of such holder’s Consideration Value (the “Cash Option B Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holder’s Cash Option B Amount divided by $8.50.

 

  3.

Option C (Mixed Consideration): (A) a cash amount equal to 20.913% of such holder’s Consideration Value (the “Cash Option C Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holders Cash Option C Amount divided by $8.50.

For purposes of the above calculations, “Consideration Value” for a holder of Arko Ordinary Shares is an amount equal to the product of (a) the number of Arko Ordinary Shares held by such holder immediately prior to the Second Effective Time multiplied by (b) the Company Per Share Value. The “Company Per Share Value” is an amount equal to the quotient of $717,273,400 divided by the total number of issued and outstanding or issuable Arko Ordinary Shares, in each case, as of the Second Effective Time. Up to $150,000,000 of cash consideration will be available to holders of Arko Ordinary Shares (including Key Arko Shareholders) if they all were to select Option C. Notwithstanding the foregoing, after giving effect to the obligations of the Voting Support Shareholders under the Voting Support Agreements, in which certain holders of Arko Ordinary Shares have agreed to elect either Option A or Option B, under no circumstance shall the actual aggregate (x) cash consideration exceed $100,045,000 nor (y) shares of New Parent Common Stock to be issued to Arko shareholders exceed 59,957,382 (if the aggregate Cash Consideration is $100,045,000) or 71,727,340 (if the aggregate Cash Consideration is $0). For more information, see “The Business Combination Agreement—Consideration to be Received in the Business Combination, “Summary of the proxy statement/prospectus—Ownership of ARKO Corp. After the Closing” and “Unaudited Pro Forma Condensed Combined Financial Information.

 

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If the Business Combination Agreement is terminated under certain circumstances, Arko will be required to pay a termination fee (the “Company Termination Fee”) in the amount of approximately $21.52 million. In the event of any payment of the Company Termination Fee to Haymaker, Haymaker will allocate any such amounts as follows (and with the following priority): (i) to pay the expenses of Haymaker incurred in connection with the Proposed Transaction; (ii) to purchase from the Sponsor the Private Placement Warrants that the Sponsor purchased in connection with the IPO; (iii) to reimburse Haymaker for its expenses in connection with the Proposed Transaction or any other potential business combinations; (iv) to pay $25,000 to the Sponsor; and (v) to pay any taxes applicable to Haymaker. Haymaker will cause the amount of the applicable Company Termination Fee remaining after such payments to be paid to the Public Stockholders at the time of the Haymaker’s liquidation on a pro rata basis based on the number of shares of Haymaker Class A Common Stock held by such Public Stockholders.

Upon the closing of the Business Combination, Haymaker securities will be delisted from Nasdaq. New Parent Common Stock and New Parent Warrants are expected to trade under the symbols “ARKO” and “ARKOW,” respectively, following the consummation of the Business Combination.

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the proposals to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety. This document also constitutes a prospectus of New Parent with respect to the New Parent Common Stock issuable in connection with the Business Combination.

 

Q.

What matters will stockholders consider at the special meeting?

 

A.

At the Haymaker special meeting of stockholders, Haymaker will ask its stockholders to vote in favor of the following proposals (the “Proposals”):

 

   

The Business Combination Proposal—a proposal to approve and adopt the Business Combination Agreement and the Business Combination.

 

   

The Lock-Up Agreement Proposal—a proposal to ratify the entry into the Registration Rights and Lock-Up Agreement with the Sponsor and the directors and officers of Haymaker.

 

   

The Incentive Plan Proposal—a proposal to approve and adopt the 2020 Plan established to be effective after the closing of the Business Combination.

 

   

The Stockholder Adjournment Proposal—a proposal to authorize the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and voting of proxies if, based on the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Business Combination Proposal or Public Stockholders have elected to redeem an amount of Haymaker Class A Common Stock such that the minimum available cash condition to the closing of the Business Combination would not be satisfied.

 

Q.

Are any of the proposals conditioned on one another?

 

A.

The Lock-Up Agreement Proposal is and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal. The Stockholder Adjournment Proposal does not require the approval of the Business Combination Proposal to be effective. It is important for you to note that in the event that the Business Combination Proposal is not approved, Haymaker will not consummate the Business Combination. If Haymaker does not consummate the Business Combination and fails to complete an initial business combination by June 11, 2021, or obtain the approval of Haymaker stockholders to extend the deadline for Haymaker to consummate an initial business combination, Haymaker will be required to dissolve and liquidate.

 

Q.

Why is Haymaker proposing the Business Combination Proposal?

 

A.

Haymaker was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Haymaker is not limited to any particular industry or sector.

 

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Haymaker received $400,000,000 from its IPO (including net proceeds from the exercise by the underwriters of their over-allotment option) and sale of the Private Placement Warrants which was placed into the Trust Account immediately following the IPO. In accordance with Haymaker’s amended and restated certificate of incorporation, the funds held in the Trust Account will be released upon the consummation of the Business Combination. See the question entitled “What happens to the funds held in the Trust Account upon consummation of the Business Combination?

There currently are 50,000,000 shares of Haymaker common stock issued and outstanding, consisting of 40,000,000 shares of Haymaker Class A Common Stock and 10,000,000 Founder Shares. In addition, there currently are 19,333,333 Haymaker Warrants issued and outstanding, consisting of 13,333,333 Public Warrants and 6,000,000 Private Placement Warrants. Following the First Effective Time, (i) the Sponsor will automatically forfeit 1,000,000 shares of New Parent Common Stock and 2,000,000 New Parent Warrants, and such shares and warrants will be cancelled and no longer outstanding and (ii) 4,000,000 shares of New Parent Common Stock that would otherwise be issuable to the Sponsor will be deferred (as further described below). Subject to the terms and conditions of the Business Combination Agreement, no more than five business days following the occurrence of Trigger Event 1 (as defined below) or Trigger Event 2 (as defined below), New Parent will issue to the Sponsor (i) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 1, and (ii) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 2 (such shares, the “Deferred Shares”). “Trigger Event 1” will occur on (i) the first day the Required VWAP (as defined below) of the New Parent Common Stock is greater than or equal to $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 5-year anniversary of the closing of the Business Combination. “Trigger Event 2” will occur on (i) the first day the Required VWAP of the New Parent Common Stock is greater than or equal to $15.00 per (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $15.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 7-year anniversary of the closing of the Business Combination. “Required VWAP” means either (A) the 5-day volume weighed average price, if the average daily trading volume during such 5-day period equals or exceeds the average daily trading volume for the 180-day period following the Closing or (B) the 20-day volume weighted average price.

Each whole Haymaker Warrant entitles the holder thereof to purchase one share of Haymaker Class A Common Stock at a price of $11.50 per share. The Haymaker Warrants will become exercisable 30 days after the completion of a business combination, and expire at 5:00 p.m., New York City time, five years after the completion of a business combination or earlier upon redemption or liquidation. The Private Placement Warrants, however, are not redeemable so long as they are held by their initial purchasers or their permitted transferees.

Under Haymaker’s amended and restated certificate of incorporation, Haymaker must provide all holders of Haymaker Class A Common Stock with the opportunity to have their Haymaker Class A Common Stock redeemed upon the consummation of Haymaker’s initial business combination in conjunction with a stockholder vote.

 

Q.

Who is Arko?

 

A.

Arko is a public company incorporated in Israel, whose shares and Bonds (Series C) are listed for trading on the Tel Aviv Stock Exchange Ltd. Arko’s main activity is its holding, through fully owned and controlled subsidiaries, of controlling rights in GPM. See “Information About Arko.”

 

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Q.

What equity stake will current Haymaker stockholders, Arko shareholders and GPM Minority Investors have in New Parent after the Closing?

 

A.

Assuming that (i) no Public Stockholders exercise their redemption rights in connection with the Business Combination and (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, upon the completion of the Business Combination the ownership of New Parent is expected to be as follows:

 

     No Redemptions of Haymaker Class A Common Stock  
     Assuming each of Arie Kotler and
Morris Willner elects Option A
and all Arko Public Shareholders
elect Option A
    Assuming each of Arie Kotler and
Morris Willner elects Option B
and all Arko Public Shareholders
elect Option C
 
     Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
    Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
 

Arie Kotler

     23,785,336        15.8     20,987,061        15.1

Morris Willner

     21,992,655        14.6     19,405,284        14.0

Arko Public Shareholders

     25,949,349        17.2     19,565,037        14.1

GPM Minority Investors

     33,772,660        22.5     33,772,660        24.4

Public Stockholders

     40,000,000        26.6     40,000,000        28.8

Holders of Founder Shares

     5,000,000        3.3     5,000,000        3.6

Assuming that (i) Public Stockholders elect to redeem 12.9 million shares of Haymaker Class A Common Stock in connection with the Business Combination and (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, upon the completion of the Business Combination the ownership of New Parent is expected to be as follows:

 

     Redemptions of 12.9 million
Shares of Haymaker Class A Common Stock
 
     Assuming each of Arie Kotler and
Morris Willner elects Option A
and all Arko Public Shareholders
elect Option A
    Assuming each of Arie Kotler and
Morris Willner elects Option B
and all Arko Public Shareholders
elect Option C
 
     Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
    Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
 

Arie Kotler

     23,785,336        17.3     20,987,061        16.7

Morris Willner

     21,992,655        16.0     19,405,284        15.4

Arko Public Shareholders

     25,949,349        18.9     19,565,037        15.5

GPM Minority Investors

     33,772,660        24.5     33,772,660        26.9

Public Stockholders

     27,114,799        19.7     27,114,799        21.5

Holders of Founder Shares

     5,000,000        3.6     5,000,000        4.0

If the actual facts differ from our assumptions, the numbers of shares and percentage interests set forth above will be different. In addition, the number of shares and percentage interests set forth above do not take into account (i) potential future exercises of New Parent Warrants or Ares warrants and (ii) 4,000,000 deferred shares of New Parent Common Stock, in the aggregate, that are issuable to the Sponsor upon the occurrence of certain events under the Business Combination Agreement. For purposes of the tables above, shares of New Parent Common Stock to be issued in respect of Arko Ordinary Shares and Haymaker Class A Common Stock held by the GPM Minority Investors prior to the consummation of the Business Combination are reflected in the rows entitled “Arko Public Shareholders” and “Public Shareholders,” respectively.

 

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Q.

Who will be the officers and directors of New Parent if the Business Combination is consummated?

 

A.

The Business Combination Agreement provides that, immediately following the consummation of the Business Combination, the board of directors of New Parent (the “New Parent Board”) will be comprised of Arie Kotler, Steven J. Heyer, Andrew Heyer, and four designees to be determined. Immediately following the consummation of the Business Combination, we expect that the following will be the officers of New Parent: Arie Kotler, Donald Bassell, and Maury Bricks. See “Management After the Business Combination.”

 

Q.

What conditions must be satisfied to complete the Business Combination?

 

A.

There are a number of closing conditions in the Business Combination Agreement, including that Haymaker’s stockholders have approved and adopted the Business Combination Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “The Business Combination Agreement—Conditions to Closing.”

 

Q.

What happens if I sell my shares of Haymaker Class A Common Stock before the special meeting of stockholders?

 

A.

The record date for the special meeting of stockholders will be earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Haymaker Class A Common Stock after the record date, but before the special meeting of stockholders, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting of stockholders. However, you will not be entitled to receive any shares of New Parent Common Stock following the Closing because only Haymaker’s stockholders on the date of the Closing will be entitled to receive shares of New Parent Common Stock in connection with the Closing.

 

Q.

What vote is required to approve the proposals presented at the special meeting of stockholders?

 

A.

The approval of the Business Combination Proposal requires the affirmative vote (in person (which would include presence at a virtual meeting) or by proxy) of the holders of a majority of all then outstanding shares of Haymaker Class A Common Stock entitled to vote thereon at the special meeting. Accordingly, a Haymaker stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the special meeting of stockholders, an abstention from voting or a broker non-vote will have the same effect as a vote against these Proposals.

The approval of the Lock-Up Agreement Proposal, Incentive Plan Proposal, and Stockholder Adjournment Proposal require the affirmative vote (in person (which would include presence at a virtual meeting) or by proxy) of the holders of a majority of the shares of Haymaker Class A Common Stock that are voted at the special meeting of stockholders. Accordingly, a Haymaker stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the special meeting of stockholders, an abstention from voting, or a broker non-vote will have no effect on the outcome of any vote on these Proposals.

 

Q.

Do Arko’s shareholders need to approve the Business Combination?

 

A.

Yes. Contemporaneously with the execution of the Business Combination Agreement, Arie Kotler, KMG Realty LLC, Yahli Group Ltd., Vilna Holding and Morris Willner (collectively, the “Key Arko Shareholders”) entered into the Voting Support Agreements, pursuant to which, among other things and subject to the terms and conditions therein, the Key Arko Shareholders agreed to vote all Arko Ordinary Shares beneficially owned by such shareholders at the time of the Arko shareholder vote on the Business Combination in favor of adoption and approval of the Business Combination Agreement and the approval of the transactions contemplated by the Business Combination Agreement, including the Business Combination, and any other matter necessary to consummate such transactions, and not to (a) transfer any of their Arko Ordinary Shares (or enter into any arrangement with respect thereto) prior to the earliest of (x) the Closing Date, (y) the termination of the Business Combination Agreement, or (z) a mutual agreement

 

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  of Haymaker and the shareholders party to the respective Voting Agreement, or (b) enter into any voting arrangement that is inconsistent with the Voting Support Agreements. Collectively, as of September 9, 2020, the Key Arko Shareholders held approximately 64% of the outstanding Arko Ordinary Shares. Under the ICL, the approval of the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement requires the affirmative vote of the holders of a majority of the Arko Ordinary Shares present in person or represented by proxy or voting deed and voting on the resolution, excluding abstentions, provided that either: (i) such majority includes a majority of the Arko Ordinary Shares voted by shareholders who are not “controlling shareholders” and who do not have a “personal interest” (as such terms are defined in the ICL) in the resolution; or (ii) the total number of Arko Ordinary Shares of shareholders who are not “controlling shareholders” and who do not have a “personal interest” in the resolution that are voted against the resolution does not exceed 2% of the outstanding voting shares of Arko.

For further information, please see the section entitled “Certain Agreements Related to The Business Combination—Voting Support Agreements.”

 

Q.

May Haymaker or Haymaker’s directors, officers or advisors, or their affiliates, purchase shares in connection with the Business Combination?

 

A.

In connection with the stockholder vote to approve the proposed Business Combination, the Sponsor and Haymaker’s board of directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account either prior to or following the Closing. There is no limit on the number of shares the Sponsor or Haymaker’s board of directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of Nasdaq. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the Sponsor, directors, officers or advisors, or their respective affiliates, will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such shares or if such purchases are prohibited by Regulation M of the Exchange Act. It is not currently anticipated that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Such purchases may include a contractual acknowledgement that such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, directors, officers or advisors, or their affiliates, purchase shares in privately negotiated transactions or in the open market from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. The purpose of these purchases would be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination, satisfy a closing condition of the Business Combination Agreement that requires Haymaker to have a minimum net worth or a minimum amount of cash at closing of the Business Combination, where it appears such requirement would not otherwise be met, or to increase the amount of cash available to Haymaker for use in the Business Combination.

 

Q.

How many votes do I have at the special meeting of stockholders?

 

A.

Haymaker’s stockholders are entitled to one vote at the special meeting for each share of Haymaker common stock held of record as of the record date. As of the close of business on the record date, there were 50,000,000 outstanding shares of Haymaker common stock.

 

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Q.

What interests do Haymaker’s current officers and directors have in the Business Combination?

 

A.

Haymaker’s board of directors and executive officers may have interests in the Business Combination that are different from, in addition to, or in conflict with, yours. These interests include:

 

   

the beneficial ownership of the Sponsor and certain of Haymaker’s directors and officers (the “Haymaker Initial Stockholders”) of an aggregate of 10,000,000 Founder Shares and 5,550,000 Private Placement Warrants, which shares and warrants would become worthless if Haymaker does not complete a business combination by June 11, 2021, as the Haymaker Initial Stockholders have waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $100.3 million and $4.73 million, respectively, based on the closing price of Haymaker Class A Common Stock and Haymaker Warrants of $10.03 and $0.8521, respectively, on Nasdaq on November 4, 2020, the record date for the special meeting of stockholders;

 

   

the fact that the Sponsor and Haymaker’s officers and directors have agreed not to redeem any Haymaker Common Shares held by them in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at $50,000,000 (excluding any deferred shares of New Parent Common Stock and assuming a value of $10.00 per share) after giving effect to the forfeitures contemplated by the Business Combination Agreement, but, given the restrictions on such shares, Haymaker believes such shares have less value;

 

   

the fact that the Sponsor and Haymaker’s officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Haymaker fails to complete an initial business combination by June 11, 2021;

 

   

the fact that the Sponsor will forfeit a portion of its Haymaker Private Placement Warrants and will receive deferred shares of New Parent Common Stock;

 

   

the fact that the Sponsor paid an aggregate of $8,325,000 for its 5,550,000 Private Placement Warrants to purchase shares of Haymaker Class A Common Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by June 11, 2021;

 

   

the right of the Sponsor to hold New Parent Common Stock and the New Parent Common Stock to be issued to the Sponsor upon exercise of its New Parent Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

the anticipated service of Steven J. Heyer (Haymaker’s Chief Executive Officer and Executive Chairman) and Andrew R. Heyer (Haymaker’s President and a member of Haymaker’s board of directors) as directors of New Parent following the Business Combination;

 

   

the continued indemnification of Haymaker’s existing directors and officers and the continuation of Haymaker’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Haymaker’s officers and directors may not participate in the formation of, or become directors or officers of, any other blank check company until Haymaker (i) has entered into a definitive agreement regarding an initial business combination or (ii) fails to complete an initial business combination by June 11, 2021;

 

   

the fact that the Sponsor and Haymaker’s officers and directors will lose their entire investment in Haymaker and will not be reimbursed for any out-of-pocket expenses, to the extent such expenses exceed the amount not required to be retained in the Trust Account, if an initial business combination is not consummated by June 11, 2021; and

 

   

the fact that if the Trust Account is liquidated, including in the event Haymaker is unable to complete an initial business combination by June 11, 2021, the Sponsor has agreed to indemnify Haymaker to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of

 

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prospective target businesses with which Haymaker has entered into an acquisition agreement or claims of any third-party for services rendered or products sold to Haymaker, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

These interests may influence Haymaker’s board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal. You should also read the section entitled “The Business Combination—Interests of Haymaker’s Directors and Officers in the Business Combination.”

 

Q.

Did Haymaker’s board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.

Haymaker’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Haymaker’s board of directors believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders. Haymaker’s board of directors also determined, without seeking a valuation from a financial advisor, that Arko’s fair market value was at least 80% of Haymaker’s net assets, excluding any taxes payable on interest earned. Accordingly, investors will be relying on the judgment of Haymaker’s board of directors as described above in valuing Arko’s business and assuming the risk that Haymaker’s board of directors may not have properly valued such business.

 

Q.

What happens if the Business Combination Proposal is not approved?

 

A.

If the Business Combination Proposal is not approved and Haymaker does not consummate a business combination by June 11, 2021, or amend its amended and restated certificate of incorporation to extend the date by which Haymaker must consummate an initial business combination, Haymaker will be required to dissolve and liquidate the Trust Account.

 

Q.

Do I have redemption rights?

 

A.

If you are a holder of Haymaker Class A Common Stock, you may redeem your shares of Haymaker Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to Haymaker to pay its franchise and income taxes and for working capital purposes, upon the consummation of the Business Combination. The per share amount Haymaker will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions Haymaker will pay to the underwriters of its IPO if the Business Combination is consummated. Holders of the outstanding Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. The Sponsor has agreed to waive its redemption rights with respect to their Founder Shares and any Haymaker Class A Common Stock that they may have acquired during or after the IPO in connection with the completion of Haymaker’s initial business combination. The Founder Shares will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on funds in the Trust Account of approximately $405.0 million on June 30, 2020, the estimated per share redemption price would have been approximately $10.13. Haymaker Class A Common Stock properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise, holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest (which interest shall be net of taxes payable by Haymaker and up to $100,000 of interest to pay dissolution expenses), in connection with the liquidation of the Trust Account.

 

Q.

Is there a limit on the number of shares I may redeem?

 

A.

A Public Stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to 15% or more of the Haymaker Class A Common Stock. Accordingly, all shares in excess of 15% of the Haymaker Class A Common Stock owned by a holder will not be redeemed. On the other hand, a Public Stockholder who (together with any affiliates and other group members) holds

 

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  less than 15% of the Haymaker Class A Common Stock may redeem all of its Haymaker Class A Common Stock for cash.

 

Q.

Will how I vote affect my ability to exercise redemption rights?

 

A.

No. You may exercise your redemption rights whether you vote your Haymaker Class A Common Stock for or against the Business Combination Proposal or do not vote your shares. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Haymaker Class A Common Stock and no longer remain stockholders, leaving stockholders who choose not to redeem their Haymaker Class A Common Stock holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of Nasdaq.

 

Q.

How do I exercise my redemption rights?

 

A.

In order to exercise your redemption rights, you must, prior to 4:30 p.m. Eastern time on December 4, 2020 (two business days before the special meeting), (i) submit a written request to Haymaker’s transfer agent that Haymaker redeem your Haymaker Class A Common Stock for cash, and (ii) deliver your stock to Haymaker’s transfer agent physically or electronically through The Depository Trust Company (“DTC”). The address of Continental Stock Transfer & Trust Company, Haymaker’s transfer agent, is listed under the question “Who can help answer my questions?” below. Haymaker requests that any requests for redemption include the identity of the beneficial owner making such request. Electronic delivery of your stock generally will be faster than delivery of physical stock certificates.

A physical stock certificate will not be needed if your stock is delivered to Haymaker’s transfer agent electronically. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and Haymaker’s transfer agent will need to act to facilitate the request. It is Haymaker’s understanding that stockholders should generally allot at least one week to obtain physical certificates from the transfer agent. However, because Haymaker does not have any control over this process or over the brokers or DTC, it may take significantly longer than one week to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with Haymaker’s consent (which may be withheld in Haymaker’s sole discretion), until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to Haymaker’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that Haymaker’s transfer agent return the shares (physically or electronically). You may make such request by contacting Haymaker’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?

 

Q.

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A.

Haymaker stockholders who exercise their redemption rights to receive cash from the Trust Account in exchange for their Haymaker Class A Common Stock generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of Haymaker Class A Common Stock redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. A stockholder’s tax basis in his, her or its shares of Haymaker Class A Common Stock generally will equal the cost of such shares. A stockholder who purchased Haymaker Units will have to allocate the cost between the shares of Haymaker Class A Common Stock and Haymaker Warrants comprising the Haymaker Units based on their relative fair market values at the time of the purchase. See the section entitled “Certain U.S. Federal Income Tax Considerations of the Redemption and the Business Combination.”

 

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Q.

What are the Israeli tax consequences of the Business Combination on holders of Arko Ordinary Shares?

 

A.

Generally, the exchange of Arko Ordinary Shares (including Arko Ordinary Shares issued pursuant to restricted shares units (“RSUs” and the “Arko RSU Shares,” respectively) which are entitled to the benefiting tax regime under Section 102 of the Israeli Income Tax Ordinance [New Version], 1961 (the “Ordinance”) for the consideration payable under the Business Combination Agreement would be treated as a taxable event both for Israeli and non-Israeli resident shareholders. However, certain relief and/or exemptions may be available under Israeli law.

Arko is filing applications for tax rulings from the Israel Tax Authority (the “ITA”) with respect to (i) withholding tax in Israel regarding the consideration payable under the Business Combination Agreement to Arko shareholders and a deferral of capital gains tax with respect to Arko shareholders who are not classified as a “controlling shareholder” (as such term defined in Section 103 of the Ordinance); and (ii) the Israeli tax treatment applicable to Arko RSU Shares issued under the benefiting tax regime of Section 102 of the Ordinance. There can be no assurance that such tax rulings will be granted before the Closing or at all or that, if obtained, such tax rulings will be granted under the conditions requested by Arko.

See the section entitled “Certain Israeli Tax Consequences of the Business Combination.”

 

Q.

If I hold Haymaker Warrants, can I exercise redemption rights with respect to my warrants?

 

A.

No. There are no redemption rights with respect to the Haymaker Warrants.

 

Q.

Do I have appraisal rights if I object to the proposed Business Combination?

 

A.

No. There are no appraisal rights available to holders of shares of Haymaker Class A Common Stock in connection with the Business Combination.

 

Q.

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A.

If the Business Combination is consummated, the funds held in the Trust Account will be released to pay (i) Haymaker stockholders who properly exercise their redemption rights, (ii) expenses incurred by Arko and Haymaker in connection with the Proposed Transactions and (iii) cash consideration to Arko shareholders as part of the Business Combination. Any additional funds available for release from the Trust Account will be used for general corporate purposes of New Parent following the Business Combination.

 

Q.

What happens if the Business Combination is not consummated?

 

A.

There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “The Business Combination Agreement—Termination” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Business Combination Agreement or otherwise, Haymaker is unable to complete a business combination by June 11, 2021, or obtain the approval of Haymaker stockholders to extend the deadline for Haymaker to consummate an initial business combination, Haymaker’s amended and restated certificate of incorporation provides that Haymaker will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Haymaker Class A Common Stock, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to Haymaker to pay taxes (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding shares of Haymaker Class A Common Stock, which redemption will completely

 

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extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and Haymaker’s board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. See the sections entitled “Risk Factors—Haymaker May Not Be Able to Complete its Initial Business Combination by June 11, 2021, in Which Case Haymaker Would Cease All Operations Except for the Purpose of Winding Up and Haymaker Would Redeem Its Public Shares and Liquidate, in Which Case Haymaker’s Public Stockholders May Only Receive $10.00 Per share of Haymaker Class A Common Stock, or Less Than Such Amount in Certain Circumstances, and Haymaker’s Existing Warrants Will Expire Worthless” and “—Haymaker’s Stockholders May Be Held Liable for Claims by Third Parties Against Haymaker to the Extent of Distributions Received by Them Upon Redemption of their Shares.” Holders of Founder Shares have waived any right to any liquidation distribution with respect to those shares.

In the event of liquidation, there will be no distribution with respect to outstanding Haymaker Warrants. Accordingly, the Haymaker Warrants will expire worthless.

 

Q.

When is the Business Combination expected to be completed?

 

A.

It is currently anticipated that the Business Combination will be consummated during the fourth quarter of 2020, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived.

For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement—Conditions to Closing of the Business Combination.

 

Q.

What do I need to do now?

 

A.

You are urged to carefully read and consider the information contained in this proxy statement/prospectus, including the financial statements and annexes attached hereto, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q.

How can I vote my shares at the Virtual Special Meeting?

 

A.

In light of the ongoing health concerns relating to the COVID-19 pandemic and to best protect the health and welfare of Haymaker’s stockholders and personnel, the special meeting will be held in virtual meeting format only. If you were a holder of record of Haymaker common stock on November 4, 2020, the record date for the special meeting of stockholders, you may vote electronically at the special meeting of stockholders. If you choose to attend the special meeting of stockholders, you will need to visit https://www.virtualshareholdermeeting.com/HYAC2020, and enter the control number found on your proxy card, voting instruction form or notice you previously received. You may vote during the special meeting of stockholders by following the instructions available on the meeting website during the meeting. If you are a beneficial owner of Haymaker Class A Common Stock but not the stockholder of record of such Haymaker Class A Common Stock, you will also need to obtain a legal proxy for the meeting provided by your bank, broker, or nominee. Please note that if your shares are held in “street name” by a broker, bank or other nominee and you wish to vote at the special meeting of stockholders, you will not be permitted to vote electronically at the special meeting of stockholders unless you first obtain a legal proxy issued in your name from the record owner. To request a legal proxy, please contact your broker, bank or other nominee holder of record. It is suggested you do so in a timely manner to ensure receipt of your legal proxy prior to the special meeting of stockholders.

 

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Q.

What will happen if I abstain from voting or fail to vote at the special meeting?

 

A.

At the special meeting of stockholders, Haymaker will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention or failure to vote will have the same effect as a vote against the Business Combination Proposal and will have no effect on any of the other proposals.

 

Q.

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A.

Signed and dated proxies received by Haymaker without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each proposal presented to the stockholders.

 

Q.

How can I vote my shares without attending the special meeting of stockholders?

 

A.

If you are a stockholder of record of Haymaker common stock as of the close of business on November 4, 2020, the record date, you can vote by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares, or otherwise follow the instructions provided by your bank, brokerage firm or other nominee. Your vote is important. Haymaker encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

 

Q.

If I am not going to attend the virtual special meeting of stockholders in person, should I return my proxy card instead?

 

A.

Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q.

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A.

No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the Proposals. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote.” Broker non-votes will not be counted for purposes of determining the presence of a quorum at the special meeting of stockholders. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide. However, in no event will a broker non-vote have the effect of exercising your redemption rights for a pro rata portion of the Trust Account.

 

Q.

May I change my vote after I have mailed my signed proxy card?

 

A.

Yes. If you are a stockholder of record of Haymaker common stock as of the close of business on the record date, whether you vote by mail, you can change or revoke your proxy before it is voted at the meeting in one of the following ways:

 

   

submit a new proxy card bearing a later date;

 

   

give written notice of your revocation to Haymaker’s secretary, provided such revocation is received prior to the vote at the special meeting; or

 

   

vote electronically at the special meeting of stockholders by visiting https://www.virtualshareholdermeeting.com/HYAC2020 and entering the control number found on

 

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your proxy card, voting instruction form or notice you previously received. Please note that your attendance at the special meeting of stockholders will not alone serve to revoke your proxy.

If your shares are held in “street name” by your broker, bank or another nominee as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.

 

Q.

What should I do if I receive more than one set of voting materials?

 

A.

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q.

What is the quorum requirement for the special meeting of stockholders?

 

A.

A quorum will be present at the special meeting of stockholders if a majority of the Haymaker common stock outstanding and entitled to vote at the meeting is represented in person (which would include presence at a virtual meeting) or by proxy. In the absence of a quorum, a majority of Haymaker’s stockholders, present in person (which would include presence at a virtual meeting) or represented by proxy, and voting thereon will have the power to adjourn the special meeting.

As of the record date for the special meeting, 25,000,001 shares of Haymaker common stock would be required to achieve a quorum. As of the record date, there were 50,000,000 shares of Haymaker common stock outstanding, 10,000,000 of which are Founder Shares held by the Sponsor.

Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you vote in person (which includes presence at the virtual meeting) at the special meeting of stockholders. Abstentions will be counted towards the quorum requirement. If there is no quorum, a majority of the shares represented by stockholders present at the special meeting or by proxy may authorize adjournment of the special meeting to another date.

 

Q.

What happens to the Haymaker Warrants I hold if I vote my shares of Haymaker common stock against approval of the Business Combination Proposal and validly exercise my redemption rights?

 

A.

Your Haymaker Warrants will not be affected by either an exercise of your redemption rights with respect to shares of Haymaker Class A Common Stock that you currently own or by your vote, either for or against approval of the Business Combination Proposal. If the Business Combination is not completed, you will continue to hold your Haymaker Warrants, and if Haymaker does not otherwise consummate an initial business combination by June 11, 2021, or obtain the approval of Haymaker Stockholders to extend the deadline for Haymaker to consummate an initial business combination, Haymaker will be required to dissolve and liquidate, and your Haymaker Warrants will expire worthless.

 

Q.

Who will solicit and pay the cost of soliciting proxies?

 

A.

Haymaker will pay the cost of soliciting proxies for the special meeting. Haymaker has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the special meeting. Haymaker has agreed to pay Morrow Sodali LLC a fee of $32,500, reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. Haymaker also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Haymaker common stock for their expenses in forwarding

 

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  soliciting materials to beneficial owners of Haymaker common stock and in obtaining voting instructions from those owners. Haymaker’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q.

Who can help answer my questions?

 

A.

If you have questions about the stockholder proposals, or if you need additional copies of this proxy statement/prospectus, the proxy card or the consent card you should contact our proxy solicitor at:

Morrow Sodali LLC

470 West Avenue

Stamford, CT 06902

Telephone: (800) 662-5200

Banks and brokers can call collect at: (203) 658-9400

Email: HYAC.info@investor.morrowsodali.com

You may also contact Haymaker at:

Haymaker Acquisition Corp. II

650 Fifth Avenue, Floor 10

New York, NY 10019

Telephone: (212) 616-9600

To obtain timely delivery, Haymaker’s stockholders and warrantholders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about Haymaker from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your Haymaker Class A Common Stock, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to Haymaker’s transfer agent prior to 4:30 p.m., New York time, on the second business day prior to the special meeting of stockholders. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section entitled “Where You Can Find More Information.”

Company Overview

The Company

Upon completion of the Business Combination, New Parent will own, directly and indirectly, 100% of GPM. Based in Richmond, VA, GPM is a leading independent convenience store operator and the 7th largest in the United States by store count1. As of June 30, 2020, GPM’s network consisted of 1,393 locations in 23 states including 1,266 company operated stores and 127 dealer-operated and GPM-supplied sites. GPM is well diversified across geographies in the Midwest, Southeast, Mid-Atlantic, Southwest, and Northeast regions of the U.S. For the twelve months ended June 30, 2020, GPM generated $3.8 billion of total revenue, including $1.5 billion of in-store sales and other revenues, and sold approximately 1.0 billion gallons of fuel. All of the figures and information presented in this section, as it relates to GPM, are presented as of June 30, 2020, unless otherwise indicated.

 

 

LOGO

Note: Store count as of 6/30/2020; excludes dealer locations.

 

1 

According to CSP Daily News’ “Top 202 Convenience Stores 2020.”



 

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GPM has achieved strong store growth over the last several years, primarily by implementing a highly successful acquisition strategy. Between January 1, 2013 and June 30, 2020, GPM has completed 17 acquisitions. As a result, GPM’s store count has grown from 320 sites in 2011 to 1,393 sites as of June 30, 2020. In addition, in October 2020, GPM consummated its acquisition of the business of Empire Petroleum Partners, LLC, or Empire, which at the consummation of the acquisition included direct operation of 84 convenience stores and supply of fuel to 1,453 independently operated fueling stations in 30 states and the District of Columbia. As a result of the closing of the transaction with Empire, GPM now operates stores or supplies fuel in 33 states and the District of Columbia.

 

 

LOGO

 

(1)

Gas Mart, Road Ranger, Arey Oil, and Hurst Harvey stores rebranded post-closing under Company’s existing brands.

(2)

Includes Broyles Hospitality locations, a seven unit Dunkin’ franchisee in Tennessee and Virginia.

(3)

GPM store count as of 6/30/20, Empire store count as of the closing of the acquisition of Empire.

GPM operates within the large and growing U.S. convenience store industry. According to National Association of Convenience Stores, the U.S. convenience store industry has grown in-store sales from $182.4 billion in 2009 to $251.9 billion in 2019, which represents a CAGR of 3.3%. Pretax Income for the industry also grew from $4.8 billion in 2009 to $11.9 billion in 2019, representing a CAGR of 9.5%.

The U.S. convenience store industry remains highly fragmented, with the 10 largest convenience store retailers accounting for approximately 19% of total industry stores in 2019. A majority of stores are managed by small, local operators with 50 or fewer stores and account for approximately 72% of all convenience stores. In addition, the U.S. convenience store industry has proven to be recession resilient as demonstrated by the designation of convenience stores as essential businesses during the statewide shutdowns associated with the COVID-19 pandemic. Furthermore, as consumers grew wary of visiting comparatively high-touch grocery stores during the pandemic, convenience stores drew more “fill-in” visits for various food and other grocery items. GPM’s management believes that convenience retail is a dynamic industry that flexes and evolves with changing consumer preference and will continue to do so as a result of the pandemic.



 

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Total U.S. Convenience Store Operators2

 

Rank

  

Company / Chain

   U.S. Store Count        

1

   LOGO      9,364       6.1

2

   LOGO      5,933       3.9

3

   LOGO      3,900       2.6

4

   LOGO      2,181       1.4

5

   LOGO      1,679       1.1

6

   LOGO      1,489       1.0

7

   LOGO       1,272 3      0.8

8

   LOGO      1,017       0.7

9

   LOGO      942       0.6

10

   LOGO      880       0.6

n/a

   Others      124,063       81.2

Competitive Strengths

GPM’s management believes that the following competitive strengths differentiate GPM from its competitors and contribute to GPM’s continued success:

Leading industry consolidator with a proven track record of integrating acquisitions and generating exceptional returns on capital. GPM is one of the largest and most active consolidators in the highly-fragmented convenience store industry. Between January 1, 2013 and June 30, 2020, GPM has completed 17 acquisitions expanding its store count approximately 4.4x. As an experienced acquiror, GPM has demonstrated the ability to generate exceptional returns on capital and meaningfully improve target performance post-integration through operating expertise and economies of scale. GPM’s management believes that continued scale advantage has enabled GPM to become a formidable industry player, enhanced its competitiveness, and positioned it as an acquirer of choice within the industry. GPM’s management also believes that the recently consummated acquisition of Empire’s business will allow GPM to grow its wholesale channel by acquiring supply contracts from independent operators in addition to retail convenience store and wholesale fuel portfolios and will enhance our cash flow profile and diversification.

 

2 

According to CSP Daily News’ “Top 202 Convenience Stores 2020”; includes only company-operated locations.

3 

GPM store count as of 12/31/2019.



 

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Leading Market Position in Highly Attractive, Diversified and Contiguous Markets. GPM’s network, as of June 30, 2020, consisted of approximately 1,400 locations across 23 states. In addition, in October 2020, GPM consummated its acquisition of the business of Empire Petroleum Partners, LLC, or Empire, which at the consummation of the acquisition included direct operation of 84 convenience stores and supply of fuel to 1,453 independently operated fueling stations in 30 states and the District of Columbia. GPM is well diversified across geographies in the Midwest, Southeast, Mid-Atlantic, Southwest, and Northeast regions of the United States. GPM has traditionally acquired a majority of its stores in smaller towns with less concentration of national-chain convenience stores. GPM’s management believes that GPM’s focus on secondary and tertiary markets allow GPM to preserve “local” brand name recognition and aligns local market needs with capital investment.

Entrenched Local Brands with Scale of Large Store Portfolio. As of June 30, 2020, GPM operated the stores under 16 regional brand names (a “Family of Community of Brands”). Upon closing of an acquisition, rather than rebranding a group of stores, GPM has typically left the existing store name in place leveraging customer familiarity and loyalty associated with the local brand. GPM believes it benefits greatly from the established brand equity in its portfolio of store banners acquired over time. GPM’s acquired brands have been in existence for an average of approximately 50 years and each brand, with its respective long-term community involvement, is highly recognizable to local customers. In addition, each individual store brand derives significant value from the scale, corporate infrastructure, and centralized marketing programs associated with GPM’s large store network. These benefits include:

 

   

Centralized merchandise purchasing and supply procurement programs;

 

   

Fuel price optimization and purchasing functions;

 

   

Common private label offerings;

 

   

Common loyalty program under the name fas REWARDS®;

 

   

Centralized environmental management and environmental practices; and

 

   

Common IT and point-of-sale platforms.

Retail/Wholesale Business Model Generates Stable and Diversified Cash Flow. GPM’s management believes that GPM’s business model of operating both retail convenience stores and wholesale motor fuel distribution generates stable and diversified cash flows providing GPM with advantages over many of its competitors. Unlike many smaller convenience store operators, GPM is able to take advantage of the combined fuel purchasing volumes to obtain attractive pricing and terms while reducing the variability in fuel margins. GPM’s management believes that operating a wholesale business also provides strategic flexibility as GPM is able to convert certain lower performing company-operated sites to consignment agent and lessee-dealer trade channels. GPM’s management believes that the benefits associated with GPM’s retail/wholesale strategy will be significantly enhanced following the closing of the Empire transaction.

Flexibility to Address Consumers Changing Needs. Despite GPM’s large size, GPM is an extremely nimble retail marketer with the ability to alter store offerings quickly in the face of changing consumers’ needs. GPM’s ability to pivot is facilitated by our streamlined and efficient internal decision making structure and process that allows for the rapid implementation of new initiatives. GPM’s flexibility is complemented by deep relationships with a host of manufacturers and suppliers worldwide. By way of example, upon the onset of the COVID-19 pandemic, GPM was able to fully stock its stores with essential items such as hand sanitizers, wipes, face masks, etc. ahead of many of its competitors.



 

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Real-time Fuel Pricing Analysis. GPM’s fuel pricing software enables real-time insight into street-level pricing conditions across the entire portfolio and estimates demand impacts from various pricing alternatives. This allows GPM to rapidly make pricing decisions that satisfy gallon and gross profit targets. Many of GPM’s competitors are smaller operators which lack this visibility into their fuel pricing strategies and as a result forego opportunities to optimize total fuel margin.

Robust Embedded EBITDA Opportunities. GPM’s primary growth strategy has historically been strategic acquisitions in contiguous and attractive markets. As a result of its significant scale and access to capital, GPM will also focus on a platform-wide store refresh program that GPM’s management believes can generate improved returns from acquired assets. Additional embedded growth levers include improving an existing loyalty program, expanding foodservice offerings in-line with recent consumer preferences, the introduction of gaming at select locations, and the expansion of private label.

Experienced Management with Significant Ownership. GPM’s management team, led by President and Chief Executive Officer Arie Kotler, has a strong track record of revenue growth and profitability improvement. Arie Kotler joined GPM in 2011, when GPM directly operated and supplied fuel to 320 stores and had revenues of approximately $1.2 billion. GPM has a deep and talented management team across all facets of GPM’s operations and have added leaders in key positions to enable continued growth in GPM’s business including the recent hire of Mike Bloom as EVP & Chief Merchandising and Marketing Officer. GPM’s management team has an average tenure with GPM and in the convenience store industry of 15 years and 22 years, respectively. Upon completion of the transaction, Arie Kotler will be New Parent’s largest individual shareholder owning approximately 15% of shares of GPM’s common stock.

Strong Balance Sheet with Capacity to Execute Growth Strategy. Upon completion of the Business Combination, GPM will have significant cash on our balance sheet and capacity available under existing lines of credit. In addition, GPM finances inventory purchases from normal trade credit which is aided by relatively quick inventory turnover, enabling GPM to manage the business without large amounts of cash and working capital. As a result of these financial resources, GPM’s management believes that GPM will have ample financial flexibility to execute on its growth strategy.

Growth Strategy

GPM’s management believes that GPM has a significant opportunity to increase its sales and profitability by continuing to execute its operating strategy, growing its store base in existing and contiguous markets through acquisition, and enhancing the performance of current stores. With its achievement of significant size and scale, GPM believes that its refocused organic growth strategy, including implementing company-wide marketing and merchandising initiatives, will add significant value to the assets it has acquired. GPM believes that this complementary strategy will help further enhance its growth and results of operations. GPM expects to use a portion of the cash available to the Company as a result of this transaction to fund its growth strategy. Specific elements of GPM’s growth strategy include the following:

Pursue Acquisitions in Existing and Contiguous Markets. GPM has completed 18 acquisitions in the last seven years, adding approximately 1,200 retail stores and approximately 1,450 dealers. GPM’s management believes this acquisition experience combined with GPM’s scalable infrastructure represents a strong platform for future growth through acquisitions within the highly fragmented convenience store industry. With 72% of the convenience store market comprised of chains with 50 or fewer locations, there is ample opportunity to continue to consolidate. GPM has traditionally acquired a majority of its stores in smaller towns with less concentration of national-chain convenience stores. GPM’s management believes that GPM’s focus on secondary and tertiary markets allow GPM to preserve “local” brand name recognition and aligns local market needs with capital investment. GPM has established a dedicated in-house M&A team that is fully focused on identifying, closing and integrating acquisitions. GPM has a highly actionable pipeline of potential targets and will focus on existing



 

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and contiguous markets where demographics and overall market characteristics are similar to its existing markets. In addition, GPM’s management believes that GPM’s unique retail/wholesale business model provides GPM with strategic flexibility to acquire chains with both retail and dealer locations. The acquisition of Empire’s business added significant scale to GPM’s wholesale fuel channel in terms of fuel gallons sold and materially increased GPM’s footprint to 10 new states and the District of Columbia. This is also expected to enable GPM to grow through the acquisition of supply contracts with independent dealers.

Store Remodel Opportunity. In addition to acquisitions, GPM believes that it has an expansive, embedded remodel opportunity within its existing store base. GPM has driven significant synergies from acquisitions, but has yet to further optimize the performance of stores it has purchased. Based on traffic counts, local demographic information and internal analyses, GPM has identified nearly 700 stores as potential candidates for remodel and anticipates remodeling approximately 360 sites over the next three to five years. Although highly dependent on store size and format, a store remodel would typically include improvements to overall layout and flow of the store, an expanded foodservice and grab-n-go offering, updated equipment, beer caves, restrooms, flooring and lighting to give the store a more common feel across the network and generate a more enticing experience for the consumer. GPM’s goal is to generate pre-tax returns on investment of at least 20% on store investments. While GPM will continue to prioritize acquisitions and its store remodel program, opportunistic new store builds will be considered to further accelerate growth.

Enhanced Marketing Initiatives. GPM will continue to pursue numerous in-store sales growth and margin enhancement opportunities that exist across GPM’s expansive footprint. These initiatives include, among others, the following:

 

   

expansion of its high margin private label and essential items offering in the stores;

 

   

launch of a revised customer relationship-focused loyalty program and associated promotional events;

 

   

enhanced store planogram and product mix optimization with data-driven placement of top-selling SKU’s across all categorizes with regional customization;

 

   

rollout of mobile ordering and curbside pickup at select stores; and

 

   

full realization of gaming machines installed in 60 stores in Virginia that were rolled out in July 2020.

Foodservice Opportunity. GPM’s current foodservice offering primarily consists of hot and fresh foods, deli, bakery, pizza, roller grill and other prepared foods. Rather than developing a proprietary foodservice program, GPM has historically relied upon franchised quick service restaurants to drive customer traffic. As a result, GPM’s management believes GPM’s under-penetration of proprietary foodservice presents an opportunity to expand foodservice offerings and margin in response to changing consumer behavior as a result of the ongoing pandemic. In addition, GPM’s management believes that continued investment in new technology platforms and applications to adapt to evolving consumer eating preferences including contactless checkout, order ahead service, and delivery will further drive growth in profitability.

Store Portfolio Optimization. Underperforming retail sites are continually reviewed for opportunities to improve store performance, switch to dealer channels, or sold outright. If investments into store offerings or appearances are not likely to return adequate returns on capital, retail sites can be converted to either lessee-dealer or consignment agent sites. After conversion, GPM receives rent from the tenant and enters into a long-term supply contract with the dealer, eliminating exposure to retail operations and store-level operating expenses. As another option, sites with higher and better alternative use potential exceeding the value to GPM of owning and operating the property as a retail or wholesale site are frequently sold.



 

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The Business

GPM primarily operates in two business channels: retail and wholesale fuel. For the twelve-month period ended June 30, 2020, GPM’s retail channel generated total revenue of $3.7 billion, including $1.5 billion of in-store sales and other revenues, and a total gross profit of $648.5 million. In addition, the GPM retail channel sold a total of 976.3 million gallons of branded and unbranded fuel to its retail customers. As a wholesale distributor of motor fuel, GPM distributes branded and unbranded motor fuel from refiners through third-party transportation providers, as of June 30, 2020, to 127 dealer locations and a small number of bulk purchasers throughout our footprint. For the twelve months ended June 30, 2020, the wholesale fuel channel sold 58.1 million gallons of fuel, generating revenues and gross profit of $135.9 million and $9.0 million, respectively. In January 2016, GPM Petroleum LP (“GPMP”) began engaging in the wholesale distribution of motor fuels on a fixed fee per gallon basis to GPM-controlled convenience stores and third parties. GPM purchases all of its fuel from GPMP. GPM owns 100% of the general partner of GPMP and 80.7% of the GPMP limited partner units. For the twelve- month period ended June 30, 2020, 99.7% of the gallons distributed by GPMP were to GPM.

Retail Business

As of June 30, 2020, GPM operated 1,266 retail convenience stores. The stores offer a wide array of cold and hot foodservice, beverages, cigarettes and other tobacco products, grocery, beer and general merchandise. A limited number of stores do not sell fuel. As of June 30, 2020, GPM operated the stores under 16 regional store brands including 1-Stop, Admiral, Apple Market®, BreadBox, E-Z Mart®, fas mart®, Jiffi Stop®, Li’l Cricket, Next Door Store®, Roadrunner Markets, Rstore, Scotchman®, shore stop®, Town Star, Village Pantry® and Young’s.

In October 2017, GPM entered into an agreement to develop 10 Dunkin’ restaurants in the Tri-Cities Area (Tennessee, Virginia and Kentucky) by May 2023. The first site was built and opened in November 2018. One additional site was opened in May 2019. Three additional sites have received approval from Dunkin’ and are planned to be opened in 2020 and 2021.



 

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LOGO

 

Banner

   Sites      Year Acquired    State(s) of Operation
LOGO      265      2018    AR, LA, OK, TX
LOGO      212      Legacy    CT, IA, IL, IN, KY, MI, NC, NE, PA,
TN, VA
LOGO      144      2013    NC, SC, TN, VA
LOGO      130      2016    IN, MI
LOGO      92      2015    IL, IN, MI, OH
LOGO      92      2017    NC, SC, TN, VA

LOGO

(formerly Road Ranger and Gas Mart)

     55      Multiple    IL, IA, KY, IN, NE, MI
LOGO      51      2019    WI
LOGO      39      2016    KY, VA
LOGO      29      2015    IN, MI
LOGO      28      2013    SC
LOGO      22      2013    SC
LOGO      17      2019    FL
LOGO      16      2016    IL, MO
LOGO      16      2015    TN
LOGO      11      2018    MI

Note: Store count as of 6/30/20; excludes nine Dunkin’ locations, two standalone Subway locations, as well as 36 additional stores carrying banners with less than ten locations.



 

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GPM offers foodservice at 309 company-operated stores. The foodservice category includes hot and fresh foods, deli, bakery, pizza, roller grill and other prepared foods. In addition, GPM has 73 branded quick service restaurants consisting of major national brands, including Blimpies, Dunkin’, Dairy Queen, Krystal, Subway, Taco Bell, Noble Romans and 2 full service restaurants. GPM’s foodservice includes the following:

GPM provides a number of traditional convenience store services that generate additional income including lottery, prepaid products, money orders, ATMs, gaming, and other ancillary product and service offerings. GPM also generates car wash revenue at approximately 80 of our locations.

GPM leverages relationships with major distributors such as Core-Mark and Grocery Supply Company as well as over 700 direct store delivery suppliers.

GPM purchases motor fuel primarily from large, integrated oil companies and independent refiners under supply agreements. In addition, GPM purchases unbranded fuel from branded fuel suppliers to supply 155 unbranded fueling locations. As of June 30, 2020, approximately 79% of GPM’s retail locations sold branded fuel. GPM’s branded fuel is primarily sold under the Valero®, Marathon®, BP® and Shell® brand names. GPM is the largest distributor of Valero branded motor fuel on the East Coast and the third largest distributor of Valero branded motor fuel in the United States. In addition to driving customer traffic, GPM’s management believes GPM’s branded fuel strategy enables it to maintain a secure fuel supply.

Wholesale Fuel Business

GPM’s wholesale fuel channel includes supply of fuel products to independent fueling station operators on a consignment basis as well as final sales of fuel to independent operators and bulk purchasers on a fixed-margin basis. Under consignment transactions (43 such arrangements as of June 30, 2020), GPM continues to own the fuel until final sale to customers at independently-operated gas stations and set the retail price at which it is sold. Gross profit created from the sale is divided between GPM and the operator (or “consignment agent”) according to the terms of the consignment agreements. In certain cases, gross profit is split by a percentage and in others, a fixed fee per gallon is paid to the operator. Alternatively, GPM makes final sales to independent operators (referred to as “lessee-dealers” if the operators lease the station from us or “open-dealers” if they control the site) and bulk purchasers on a fixed-fee basis. Typically, fuel margin reflects GPM’s all-in fuel costs (after transportation costs, prompt pay discount and rebates) under these arrangements, largely eliminating our exposure to commodity price movements. Additionally, GPM leases space to and collect rent from consignment agents and lessee-dealers at sites under GPM’s control. The acquisition of Empire’s business added significant scale to GPM’s wholesale fuel channel in terms of fuel gallons sold (including 195 sites on a consignment basis) and materially increased GPM’s footprint to 10 new states and the District of Columbia.

Empire Acquisition

In October 2020, GPM consummated its acquisition of Empire Petroleum Partners’ fuel distribution business in the United States for $353 million paid at closing plus an additional $20 million to be paid in equal annual installments over five years, and potential post-closing contingent amounts of up to an additional $45 million. Empire is one of the largest and most diversified wholesale fuel distributors in the United States, distributing motor fuels to approximately 1,450 independently operated fueling stations in 30 states and the District of Columbia. In addition to supplying third party sites, Empire directly operates approximately 85 convenience stores. As a result of the closing of the transaction with Empire, GPM now operates stores or supplies fuel in 33 states and the District of Columbia. Empire sells branded and unbranded fuel products to customers on both fixed margin and consignment bases under long-term contracts. It maintains relationships with all major oil companies, which enables Empire to offer customers a broad portfolio of fuel brands and security of supply. Since 2011, Empire completed 23 acquisitions to grow its distribution base rapidly, complementing its organic growth which includes single-site additions of new supply contracts.



 

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Real Estate

As of June 30, 2020, GPM owned 216 properties including 182 company-operated sites, 14 consignment agent locations, and 20 lessee-dealer sites. Additionally, as of June 30, 2020, GPM had long-term control over a leased portfolio comprising 1,142 locations.

Haymaker

Haymaker is a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, referred to throughout this proxy statement/prospectus as its initial business combination. Although Haymaker may pursue its initial business combination in any business, industry or geographic location, it has focused on opportunities to capitalize on the ability of its management team, particularly its executive officers, to identify, acquire and operate a business in the consumer and consumer-related products and services industries.

Haymaker’s units, Haymaker Class A Common Stock and Haymaker Warrants are currently listed on the Nasdaq Capital Market, under the symbols “HYACU,” “HYAC,” and “HYACW,” respectively. Upon the closing of the Business Combination, Haymaker securities are expected to be delisted from Nasdaq. Shares of New Parent Common Stock and New Parent Warrants are expected to trade under the symbols “ARKO” and “ARKOW,” respectively, following the consummation of the Business Combination.

The mailing address of Haymaker’s principal executive office is 650 Fifth Avenue, Floor 10, New York, NY 10019, and its telephone number is (212) 619-9600.

Arko

Arko is a public company incorporated in Israel, whose shares and Bonds (Series C) are listed for trading on the Tel Aviv Stock Exchange Ltd. Arko’s main activity is its holding, through fully owned and controlled subsidiaries, of controlling rights in GPM, which is the entity responsible for operating the business described in “Information About Arko.” Following the closing of the Business Combination, both Arko and GPM will be indirect wholly-owned subsidiaries of New Parent.

The mailing address of Arko’s principal executive office is 3 Hanechoshet Tel Aviv-Jaffa, 6971068 Israel, and its telephone number is +972-722748790.

For more information about Arko, see the sections entitled “Information About Arko” and “Arko Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

New Parent

New Parent is a Delaware corporation that was incorporated on August 26, 2020. To date, New Parent has not conducted any material activities other than those incident to its formation. Upon the closing of the Business Combination, the New Parent Common Stock and New Parent Warrants will be registered under the Exchange Act and are expected to be listed on Nasdaq under the symbols “ARKO” and “ARKOW,” respectively.

New Parent’s mailing address is 650 Fifth Avenue, Floor 10, New York, NY 10019, and its telephone number is (212) 619-9600. The mailing address of New Parent’s principal executive office after the closing of the Business Combination will be 8565 Magellan Parkway, Suite 400, Richmond, VA 23227, and its telephone number will be (804) 730-1568.



 

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New Parent is currently managed by a board of directors with three directors. Currently, the directors of New Parent are Andrew R. Heyer, Christopher Bradley, and Joseph Tonnos. Currently, Steven J. Heyer, serving as Chief Executive Officer and Executive Chairman, Andrew R. Heyer, serving as President, Christopher Bradley, serving as Chief Financial Officer and Secretary, and Joseph Tonnos, serving as Senior Vice President of Business Development, are the sole officers at New Parent.

The Business Combination

General

On September 8, 2020, Haymaker, New Parent, Merger Sub I, Merger Sub II, and Arko entered into the Business Combination Agreement, pursuant to which New Parent, Haymaker and Arko will enter into a business combination resulting in Arko and Haymaker becoming wholly owned subsidiaries of New Parent. The consideration payable under the Business Combination Agreement to the shareholders of Arko consists of a combination of cash and shares of New Parent (as further explained below) and the stockholders and warrantholders of Haymaker will receive shares and warrants of New Parent (as further explained below). The terms of the Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions, termination fee provisions and other terms relating to the mergers and the other transactions contemplated thereby, are summarized below. Capitalized terms used in this section but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.

For more information about the transactions contemplated in the Business Combination Agreement, please see the sections entitled “The Business Combination Agreement” and “Certain Agreements Related to the Business Combination.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

Organizational Structure

The acquisition is structured as a “double dummy” transaction, resulting in the following:

 

  (a)

Each of New Parent, Merger Sub I and Merger Sub II are newly formed entities that were formed for the sole purpose of entering into and consummating the transactions set forth in the Business Combination Agreement. New Parent is a wholly-owned direct subsidiary of Haymaker and both Merger Sub I and Merger Sub II are wholly-owned direct subsidiaries of New Parent.

 

  (b)

On the Closing Date, each of the following transactions will occur in the following order: (i) Merger Sub I will merge with and into Haymaker (the “First Merger”), with Haymaker surviving the First Merger as a wholly-owned subsidiary of New Parent (the “First Surviving Company”); (ii) immediately following the First Merger, Merger Sub II will merge with and into Arko (the “Second Merger”), with Arko surviving the Second Merger as a wholly-owned subsidiary of New Parent (the “Second Surviving Company”); and (iii) after completion of the Second Merger, New Parent will organize a new corporation or limited liability company (“Newco”) and transfer all shares of capital stock in Arko to Newco in exchange for all shares of capital stock or equity interests of Newco. Following the transactions, the First Surviving Company and the Second Surviving Company will be wholly-owned subsidiaries of New Parent.

Consideration in the Business Combination

Effect of the Business Combination on Existing Haymaker Equity

Subject to the terms and conditions of the Business Combination Agreement (including certain adjustments described under “Consideration to be Received in the Business Combination—Forfeiture and Deferral of New



 

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Parent Equity Held by the Sponsor” pursuant to and in accordance with the terms of the Business Combination Agreement), the Business Combination will result in, among other things, each share of Haymaker Class A Common Stock issued and outstanding immediately prior to the First Effective Time being automatically converted into and exchanged for one validly issued, fully paid and nonassessable share of New Parent Common Stock.

Forfeiture and Deferral of New Parent Equity Held by the Sponsor

Following the First Effective Time, (i) the Sponsor will automatically forfeit 1,000,000 shares of New Parent Common Stock and 2,000,000 New Parent Warrants, and such shares and warrants will be cancelled and no longer outstanding and (ii) 4,000,000 shares of New Parent Common Stock that would otherwise be issuable to the Sponsor will be deferred (as further described below). Subject to the terms and conditions of the Business Combination Agreement, no more than five business days following the occurrence of Trigger Event 1 (as defined below) or Trigger Event 2 (as defined below), New Parent will issue to the Sponsor (i) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 1, and (ii) 2,000,000 shares of New Parent Common Stock in the case of Trigger Event 2 (such shares, the “Deferred Shares”). “Trigger Event 1” will occur on (i) the first day the Required VWAP (as defined below) of the New Parent Common Stock is greater than or equal to $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $13.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 5-year anniversary of the closing of the Business Combination. “Trigger Event 2” will occur on (i) the first day the Required VWAP of the New Parent Common Stock is greater than or equal to $15.00 per (subject to adjustment as set forth in the Business Combination Agreement) or (ii) a change of control of New Parent where the shares of New Parent Common Stock are sold for at least $15.00 per share (subject to adjustment as set forth in the Business Combination Agreement), in each case, only if such event occurs prior to the 7-year anniversary of the closing of the Business Combination. “Required VWAP” means either (A) the 5-day volume weighed average price, if the average daily trading volume during such 5-day period equals or exceeds the average daily trading volume for the 180-day period following the Closing or (B) the 20-day volume weighted average price.

Conversion of Arko Ordinary Shares

At the Second Effective Time, each ordinary share, par value 0.01 New Israeli Shekel per share, of Arko (all such issued and outstanding shares, including those to be issued in respect of Arko’s restricted stock units, are collectively referred to as the “Arko Ordinary Shares”) issued and outstanding immediately prior to the Second Effective Time will be cancelled and, subject to the terms of the Business Combination Agreement, each holder of Arko Ordinary Shares will receive the following consideration, at such holder’s election:

 

  1.

Option A (Stock Consideration): The number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to the quotient of (i) such holder’s Consideration Value divided by (ii) $10.00.

 

  2.

Option B (Mixed Consideration): (A) a cash amount equal to 10% of such holder’s Consideration Value (the “Cash Option B Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holder’s Cash Option B Amount divided by $8.50.

 

  3.

Option C (Mixed Consideration): (A) a cash amount equal to 20.913% of such holder’s Consideration Value (the “Cash Option C Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holders Cash Option C Amount divided by $8.50.



 

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For purposes of the above calculations, “Consideration Value” for a holder of Arko Ordinary Shares is an amount equal to the product of (a) the number of Arko Ordinary Shares held by such holder immediately prior to the Second Effective Time multiplied by (b) the Company Per Share Value. The “Company Per Share Value” is an amount equal to the quotient of $717,273,400 divided by the total number of issued and outstanding or issuable Arko Ordinary Shares, in each case, as of the Second Effective Time. Up to $150,000,000 of cash consideration will be available to holders of Arko Ordinary Shares (including Key Arko Shareholders) if they all were to select Option C. Notwithstanding the foregoing, after giving effect to the obligations of the Voting Support Shareholders under the Voting Support Agreements, in which certain holders of Arko Ordinary Shares have agreed to elect either Option A or Option B, under no circumstance shall the actual aggregate (x) cash consideration exceed $100,045,000 nor (y) shares of New Parent Common Stock to be issued to Arko shareholders exceed 59,957,382 (if the aggregate Cash Consideration is $100,045,000) or 71,727,340 (if the aggregate Cash Consideration is $0). In addition, each holder of Arko Ordinary Shares will be entitled to receive a pro rata payment, in the form of a dividend or additional cash consideration, in respect of cash held by Arko in excess of Arko’s debt, each measured at least five business days before Closing.

Below is an illustration of what a hypothetical Arko Public Shareholder would receive per Arko Ordinary Share under each merger consideration option, assuming there are issued and outstanding or issuable Arko Ordinary Shares as of the Second Effective Time equal to 829,698,484 (which represents the number of such shares as of September 10, 2020). In addition to the stock consideration and cash consideration received under each option, the hypothetical Arko Public Shareholder will be entitled to receive a pro rata payment, in the form of a dividend or additional cash consideration, in respect of cash held by Arko in excess of Arko’s debt, each measured at least five business days before Closing. This illustration results in a Company Per Share Value (and a Consideration Value per Arko Ordinary Share) of $0.86, which is calculated as the quotient of $717,273,400 divided by the 829,698,484 shares assumed to be issued and outstanding or issuable Arko Ordinary Shares as of the Second Effective Time.

 

  1.

Option A: The hypothetical Arko Public Shareholder will receive 0.086 shares of New Parent Common Stock per Arko Ordinary Share that he, she, or it holds. The stock consideration is calculated as the quotient of (i) $0.86, the Consideration Value per Arko Ordinary Share for the hypothetical Arko Public Shareholder, divided by (ii) $10.00.

 

  2.

Option B: The hypothetical Arko Public Shareholder will receive 0.076 shares of New Parent Common Stock per Arko Ordinary Share and $0.086 of cash consideration per Arko Ordinary Share that he, she, or it holds. The Cash Option B Amount is $0.086 per Arko Ordinary Share, calculated as 10% of $0.86, the hypothetical Arko Public Shareholder’s Consideration Value per Arko Ordinary Share. The stock consideration under this option is calculated as (i) $0.86, the Consideration Value per Arko Ordinary Share of the hypothetical Arko Public Shareholder, divided by $10.00, minus (ii) such holder’s Cash Option B Amount per Arko Ordinary Share divided by $8.50.

 

  3.

Option C: The hypothetical Arko Public Shareholder will receive 0.065 shares of New Parent Common Stock per Arko Ordinary Share and $0.18 of cash consideration per Arko Ordinary Share that he, she, or it holds. The Cash Option C Amount per Arko Ordinary Share is $0.18, calculated as 20.913% of $0.86, the hypothetical Arko Public Shareholder’s Consideration Value per Arko Ordinary Share. The stock consideration under this option is calculated as (i) $0.86, the Consideration Value per Arko Ordinary Share of the hypothetical Arko Public Shareholder, divided by $10.00, minus (ii) such holder’s Cash Option C Amount per Arko Ordinary Share divided by $8.50.



 

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Other Agreements Related to the Business Combination Agreement

GPM Equity Purchase Agreement

In connection with the Business Combination Agreement, New Parent, Haymaker, and the GPM Minority Investors entered into the GPM Equity Purchase Agreement, a copy of which is attached to this proxy statement/prospectus as Annex F. The GPM Equity Purchase Agreement provides, among other things:

Purchase and Sale

On the Closing Date, New Parent will purchase from the GPM Minority Investors all of their (a) direct and indirect membership interests in GPM, (b) warrants, options or other rights to purchase or otherwise acquire securities of GPM, equity appreciation rights or profits interests relating to GPM, and (c) obligations, evidences of indebtedness or other securities or interests, but only to the extent convertible or exchange into securities described in clauses (a) or (b), including its membership interests (the “Equity Securities”). In exchange for such Equity Securities, the GPM Minority Investors will receive shares of New Parent Common Stock and Ares will receive the New Ares Warrants (as described below).

Ares Put Right

Within the 30-day period (the “Election Period”) following February 28, 2023 (the “Trigger Date”), Ares has a right to require New Parent to purchase the shares of New Parent Common Stock received by Ares pursuant to the GPM Equity Purchase Agreement (the “Ares Shares”) at a price (the “Put Price”) of $12.935 per share, subject to certain adjustment for dividends and as described below (such right, the “Ares Right”). The Ares Right may be exercised by delivering written notice to New Parent within the Election Period. Upon receipt of such notice, New Parent will have the option to either purchase the Ares Shares for cash, or in lieu of such purchase, New Parent may issue additional shares of New Parent Common Stock (the “Additional Shares”) to Ares (with the value based on the New Parent VWAP) in an amount sufficient so that the value of the Ares Shares and the Additional Shares, and any dividends, distributions, or other payments received in respect of the Ares Shares or Ares’ membership interest in GPM collectively equal $27,294,053, or to the extent that Ares has transferred a portion, but not all of the Ares Shares, the applicable pro rata amount thereof, based on the New Parent VWAP. The Put Price shall be adjusted proportionately to reflect any stock split, reverse stock split, or other similar adjustment in respect of the New Parent Common Stock during the Holding Period. The Ares Right will automatically expire upon the earliest of (i) if during the period between the Closing Date and the Trigger Date (the “Holding Period”), the shares of New Parent Common Stock trade at a sale price of at least 105% of the Put Price on any 20 trading days within any 30 trading day period (such 30 day period, the “Sale Window”); provided that (a) during such 20 trading days the average number of shares of New Parent Common Stock traded per trading day is at least 1.25 million and (b) the Ares Shares are freely tradeable during the entirety of the Sale Window, (ii) if Ares sells or otherwise transfers any of the Ares Shares during the Holding Period to a party that is not an affiliate or a fund, investment vehicle or other entity that is controlled managed or advised by Ares or any of its affiliates, or (iii) Ares does not provide the notice of exercise of the Ares Right within the Election Period.

At the closing of the Business Combination, Ares will exchange its warrants to acquire membership interest in GPM (the “Existing Ares Warrants”) for warrants to purchase 1.1 million shares of New Parent Common Stock for an exercise price of $10.00 per share, with an exercise period of 5 years from the Closing Date (the “New Ares Warrants”).

For purposes of the Ares Right, “New Parent VWAP” is defined as the volume weighted average price of New Parent Common Stock for a 30-day trading day period ending on the Trigger Date (or, if the Trigger Date is not a trading day, ending on the trading day immediately preceding the Trigger Date), on Nasdaq or other stock



 

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exchange or, if not then listed, New Parent’s principal trading market, in any such case, as reported by Bloomberg or, if not available on Bloomberg, as reported by Morningstar.

Registration Rights and Lock-Up Agreement

In connection with the Proposed Transactions, New Parent will enter into the Registration Rights and Lock-Up Agreement at Closing. Pursuant to the terms of the Registration Rights and Lock-Up Agreement, New Parent will be obligated to file a registration statement to register the resale of certain securities of New Parent held by the Holders (as defined in the Registration Rights and Lock-Up Agreement). The Registration Rights and Lock-Up Agreement also provides for certain “demand” and “piggy-back” registration rights, subject to certain requirements and customary conditions.

The Registration Rights and Lock-Up Agreement further provides that the Holders be subject to certain restrictions on transfer of New Parent Common Stock for 180 days following the Closing, subject to certain exceptions. The Registration Rights and Lock-Up Agreement will replace the letter agreement, dated June 6, 2019, pursuant to which the initial stockholder of Haymaker and its directors and officers had agreed to, among other things, certain restrictions on the transfer of Haymaker Class A Common Stock (and any securities into which such Haymaker Class A Common Stock is convertible into) for one year following the Closing, subject to certain exceptions.

Voting Support Agreements

In connection with the execution of the Business Combination Agreement, Haymaker entered into the Voting Support Agreements (each, a “Voting Support Agreement” and collectively, the “Voting Support Agreements”), one with Morris Willner and his affiliates WRDC Enterprises and Vilna Holdings, and one with Arie Kotler and his affiliates KMG Realty LLC and Yahli Group Ltd. (together with Morris Willner and Vilna Holdings, the “Voting Support Shareholders”). Pursuant to the Voting Support Agreements, the Voting Support Shareholders, as Arko shareholders, have agreed to vote, subject to certain exceptions, all of their Arko Ordinary Shares (a) in favor of the approval and adoption of the Business Combination Agreement, the GPM Equity Purchase Agreement, and related transaction documents, (b) in favor of any matter reasonably necessary to the consummation of the Business Combination and considered and voted upon by Arko, (c) in favor of any proposal to adjourn or postpone to a later date any meeting of the shareholders of Arko at which any of the foregoing matters are submitted for consideration and vote of the Arko shareholders if there are not sufficient votes for approval of any such matters on the date on which the meeting is held, and (d) against at any action, agreement or transactions (other than the Business Combination Agreement and the transactions contemplated thereby) or proposal that would reasonably be expected to (i) prevent, impede, delay or adversely affect in any material respects the transactions contemplated by the Business Combination Agreement or any other transaction document or (ii) result in failure of the transactions contemplated by the Business Combination to be consummated.

Additionally, each of Arie Kotler and Morris Willner has agreed for himself, and on behalf of any affiliates holding Arko Ordinary Shares, to elect either Option A or Option B. Each of Mr. Kotler and Mr. Willner has also agreed to not to, among other things, sell, assign, transfer, or dispose of any of the Arko Ordinary Shares they hold.

Warrant Amendment

At the First Effective Time, Haymaker, New Parent, and Continental Stock Transfer & Trust Company will enter into the warrant assignment, assumption and amendment agreement. Such agreement will amend the Haymaker Warrant Agreement, as Haymaker will assign all its rights, title and interest in the Haymaker Warrant



 

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Agreement to New Parent. Pursuant to the amendment, all Haymaker Warrants will no longer be exercisable for shares of Haymaker Class A Common Stock, but instead will be exercisable for shares of New Parent Common Stock on substantially the same terms that were in effect prior to the First Effective Time under the terms of the Haymaker Warrant Agreement.

Sponsor Support Agreement

Concurrently with the execution of the Business Combination Agreement, New Parent entered into the Sponsor Support Agreement with the Sponsor, and for purposes of Section 6 and Section 12 thereof, Andrew R. Heyer and Steven J. Heyer, pursuant to which the Sponsor has agreed to vote all of its shares of Haymaker common stock (a) in favor of the approval and adoption of the Business Combination Agreement, GPM Equity Purchase Agreement, and other transaction documents, (b) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated by the Business Combination Agreement, and (c) against at any action, agreement or transactions (other than the Business Combination Agreement and the transactions contemplated thereby) or proposal that would reasonably be expected to (i) prevent or materially delay the transactions contemplated by the Business Combination Agreement or any other transaction document or (ii) result in failure of the transactions contemplated by the Business Combination to be consummated. In addition, the Sponsor, Andrew R. Heyer and Steven J. Heyer (each, a “Specified Holder”) have agreed to vote, or cause to be voted, all shares of New Parent Common Stock owned beneficially or of record, whether directly or indirectly, by such Specified Holder or any of its affiliates, or over which such Specified Holder or any of its affiliates maintains or has voting control, directly or indirectly, in favor of Arie Kotler if he is a nominee for election to the board of directors of New Parent from the Closing for a period of up to seven years following of the Closing, subject to certain exceptions contained in the Sponsor Support Agreement.

Following the First Effective Time, (i) the Sponsor will automatically forfeit 1,000,000 shares of New Parent Common Stock and 2,000,000 New Parent Warrants, and such shares and warrants will be cancelled and no longer outstanding and (ii) 4,000,000 shares of New Parent Common Stock that would otherwise be issuable to the Sponsor will be deferred (subject to certain triggering events). For more information about the Sponsor’s right to receive Deferred Shares, see the section entitled “Consideration to be Received in the Business Combination—Forfeiture and Deferral of New Parent Equity Held by the Sponsor.”

Voting Letter Agreement

In connection with the Proposed Transactions, Arie Kotler, Morris Willner, WRDC Enterprises and Vilna Holdings entered into a letter agreement (the “Voting Letter Agreement”). Pursuant to the Voting Letter Agreement, until the seventh anniversary of the Closing, each of Morris Willner and Vilna Holdings (each, a “Willner Party”) shall vote, or cause to be voted, all shares of New Parent Common Stock owned beneficially or of record, whether directly or indirectly, by such Willner Party or any of its affiliates, or over which such Willner Party or any of its affiliates maintains or has voting control, directly or indirectly, at any annual or special meeting of stockholders of New Parent (including, if applicable, through the execution of one or more written consents if the stockholders of New Parent are requested to act through the execution of written consent), in favor of Arie Kotler if he is a nominee for election to the board of directors of New Parent.

Termination Fee Letter Agreement

On September 8, 2020, Haymaker and the Sponsor entered into a letter agreement related to the Company Termination Fee (the “Termination Fee Letter Agreement”). In the event of any payment of the Company Termination Fee to Haymaker, Haymaker will allocate any such amounts as follows (and with the following priority): (i) to pay the expenses of Haymaker incurred in connection with the Proposed Transaction; (ii) to purchase from the Sponsor the Private Placement Warrants that the Sponsor purchased in connection with the



 

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IPO; (iii) to reimburse Haymaker for its expenses in connection with the Proposed Transaction or any other potential business combinations; (iv) to pay $25,000 to the Sponsor; and (v) to pay any taxes applicable to Haymaker. Haymaker will cause the amount of the applicable Company Termination Fee remaining after such payments to be paid to the Public Stockholders at the time of the Haymaker’s liquidation on a pro rata basis based on the number of shares of Haymaker Class A Common Stock held by such Public Stockholders.

Interests of Certain Persons in the Business Combination

In considering the recommendation of Haymaker’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, the Sponsor and our directors and officers have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include:

 

   

the beneficial ownership of the Sponsor and certain of Haymaker’s directors and officers (the “Haymaker Initial Stockholders”) of an aggregate of 10,000,000 Founder Shares and 5,550,000 Private Placement Warrants, which shares and warrants would become worthless if Haymaker does not complete a business combination by June 11, 2021, as the Haymaker Initial Stockholders have waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $100.3 million and $4.73 million, respectively, based on the closing price of Haymaker Class A Common Stock and Haymaker Warrants of $10.03 and $0.8521, respectively, on Nasdaq on November 4, 2020, the record date for the special meeting of stockholders;

 

   

the fact that the Sponsor and Haymaker’s officers and directors have agreed not to redeem any Haymaker Common Shares held by them in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at $50,000,000 (excluding any deferred shares of New Parent Common Stock and assuming a value of $10.00 per share) after giving effect to the forfeitures contemplated by the Business Combination Agreement, but, given the restrictions on such shares, Haymaker believes such shares have less value;

 

   

the fact that the Sponsor and Haymaker’s officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Haymaker fails to complete an initial business combination by June 11, 2021;

 

   

the fact that the Sponsor will forfeit a portion of its Haymaker Private Placement Warrants and will receive deferred shares of New Parent Common Stock;

 

   

the fact that the Sponsor paid an aggregate of $8,325,000 for its 5,550,000 Private Placement Warrants to purchase shares of Haymaker Class A Common Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by June 11, 2021;

 

   

the right of the Sponsor to hold New Parent Common Stock and the New Parent Common Stock to be issued to the Sponsor upon exercise of its New Parent Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

the anticipated service of Steven J. Heyer (Haymaker’s Chief Executive Officer and Executive Chairman) and Andrew R. Heyer (Haymaker’s President and a member of Haymaker’s board of directors) as directors of New Parent following the Business Combination;



 

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the continued indemnification of Haymaker’s existing directors and officers and the continuation of Haymaker’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Haymaker’s officers and directors may not participate in the formation of, or become directors or officers of, any other blank check company until Haymaker (i) has entered into a definitive agreement regarding an initial business combination or (ii) fails to complete an initial business combination by June 11, 2021;

 

   

the fact that the Sponsor and Haymaker’s officers and directors will lose their entire investment in Haymaker and will not be reimbursed for any out-of-pocket expenses, to the extent such expenses exceed the amount not required to be retained in the Trust Account, if an initial business combination is not consummated by June 11, 2021; and

 

   

the fact that if the Trust Account is liquidated, including in the event Haymaker is unable to complete an initial business combination by June 11, 2021, the Sponsor has agreed to indemnify Haymaker to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Haymaker has entered into an acquisition agreement or claims of any third-party for services rendered or products sold to Haymaker, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

These interests may influence Haymaker’s board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal.

Reasons for the Approval of the Business Combination

After careful consideration, Haymaker’s board of directors recommends that Haymaker stockholders vote “FOR” each Haymaker proposal being submitted to a vote of the Haymaker stockholders at the Haymaker special meeting of stockholders.

For a description of Haymaker’s reasons for the approval of the Business Combination and the recommendation of our board of directors, see the section entitled “The Business Combination—Haymaker’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Sources and Uses for the Business Combination

The following table summarizes the sources and uses for funding the Business Combination. These figures assume that no Public Stockholders exercise their redemption rights in connection with the Business Combination.

 

Sources of Funds

(in millions)

      

Haymaker Cash in Trust

   $ 406  

Arko/GPM Equity Rollover

     937  

GPM Cash on Balance Sheet(2)

     82  

Founder Shares(1)

     50  
  

 

 

 

Total Sources

   $ 1,475  
  

 

 

 


 

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Uses of Funds

(in millions)

      

Optional Cash Consideration to Arko shareholders

   $ 100  

Arko/GPM Equity Rollover

     937  

Founder Shares(1)

     50  

New Balance Sheet Cash

     264  

GPM Cash on Balance Sheet(2)

     82  

Estimated Transaction Expenses

     42  
  

 

 

 

Total Uses

   $ 1,475  
  

 

 

 

 

Note: Transaction summary assumes maximum cash consideration at closing.

 

(1)

5.0 million Founder Shares will be cancelled; 4.0 million of those shares will only be issued upon achieving the following milestones and are thus excluded from pro forma share count: 2.0 million withheld until share price reaches $13.00 (and cancelled if not achieved in five years), another 2.0 million withheld until stock price reaches $15.00 (and cancelled if not achieved in seven years).

(2)

Includes $32 million of posted cash collateral.

Redemption Rights

Under Haymaker’s amended and restated certificate of incorporation, holders of Haymaker Class A Common Stock may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to Haymaker to pay its franchise and income taxes, by (b) the total number of shares of Haymaker Class A Common Stock included as part of the units issued in the IPO. However, Haymaker will not redeem any public shares to the extent that such redemption would result in Haymaker having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. For illustrative purposes, based on funds in the Trust Account of approximately $405.0 million on June 30, 2020, the estimated per share redemption price would have been approximately $10.13. Under Haymaker’s amended and restated certificate of incorporation, in connection with an initial business combination, a Public Stockholder, together with any affiliate or any other person with whom such stockholder is acting in concert of as a “group” (as defined under Section 13(d)(3) of the Exchange Act), is restricted from seeking redemption rights with respect to more than 15% of the public shares.

If a holder exercises its redemption rights, then such holder will be exchanging its shares of Haymaker Class A Common Stock for cash and will no longer own shares of Haymaker Class A Common Stock and will not participate in the future growth of New Parent, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to Haymaker’s transfer agent in accordance with the procedures described herein. See the section entitled “The Special Meeting of Haymaker Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.



 

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Ownership of New Parent After the Closing

Assuming that (i) no Public Stockholders exercise their redemption rights in connection with the Business Combination and (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, upon the completion of the Business Combination the ownership of New Parent is expected to be as follows:

 

     No Redemptions of Haymaker Class A Common Stock  
     Assuming each of Arie Kotler and
Morris Willner elects Option A
and all Arko Public  Shareholders
elect Option A
    Assuming each of Arie Kotler and
Morris Willner elects Option B
and all Arko Public  Shareholders
elect Option C
 
     Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
    Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
 

Arie Kotler

     23,785,336        15.8     20,987,061        15.1

Morris Willner

     21,992,655        14.6     19,405,284        14.0

Arko Public Shareholders

     25,949,349        17.2     19,565,037        14.1

GPM Minority Investors

     33,772,660        22.5     33,772,660        24.4

Public Stockholders

     40,000,000        26.6     40,000,000        28.8

Holders of Founder Shares

     5,000,000        3.3     5,000,000        3.6

Assuming that (i) Public Stockholders elect to redeem 12.9 million shares of Haymaker Class A Common Stock in connection with the Business Combination and (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, upon the completion of the Business Combination the ownership of New Parent is expected to be as follows:

 

     Redemptions of 12.9 Million
Shares of Haymaker Class A Common Stock
 
     Assuming each of Arie Kotler and
Morris Willner elects Option A
and all Arko Public Shareholders
elect Option A
    Assuming each of Arie Kotler and
Morris Willner elects Option B
and all Arko Public Shareholders
elect Option C
 
     Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
    Number of Shares
of New Parent
Common Stock
     Percentage of total
Shares outstanding
 

Arie Kotler

     23,785,336        17.3     20,987,061        16.7

Morris Willner

     21,992,655        16.0     19,405,284        15.4

Arko Public Shareholders

     25,949,349        18.9     19,565,037        15.5

GPM Minority Investors

     33,772,660        24.5     33,772,660        26.9

Public Stockholders

     27,114,799        19.7     27,114,799        21.5

Holders of Founder Shares

     5,000,000        3.6     5,000,000        4.0

If the actual facts differ from our assumptions, the numbers of shares and percentage interests set forth above will be different. In addition, the number of shares and percentage interests set forth above do not take into account (i) potential future exercises of New Parent Warrants or Ares warrants and (ii) 4,000,000 deferred shares of New Parent Common Stock, in the aggregate, that are issuable to the Sponsor upon the occurrence of certain events under the Business Combination Agreement. For purposes of the tables above, shares of New Parent Common Stock to be issued in respect of Arko Ordinary Shares and Haymaker Class A Common Stock held by the GPM Minority Investors prior to the consummation of the Business Combination are reflected in the rows entitled “Arko Public Shareholders” and “Public Shareholders,” respectively.

Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.



 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ARKO

Prior to the closing of the Business Combination, Arko, a holding company, holds a majority of the outstanding equity of GPM, which is the entity responsible for operating the business described in “Information About Arko.” Following the closing of the Business Combination, both Arko and GPM will be indirect wholly-owned subsidiaries of New Parent.

The following table contains selected historical consolidated financial data for Arko Holdings Ltd. for the three and six months ended June 30, 2020 and 2019, and for the years ended December 31, 2019, 2018, 2017, 2016 and 2015. The financial data as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 has been derived from the audited consolidated financial statements of Arko included elsewhere in this proxy statement/prospectus. The financial data as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 have been derived from the unaudited condensed consolidated financial statements of Arko included elsewhere in this proxy statement/prospectus. The financial data as of December 31, 2017 has been derived from the audited financial statements not included in this proxy statement/prospectus. The financial data as of December 31, 2016 and 2015 and for the years ended December 31, 2016 and 2015 have been derived from the consolidated financial statements of Arko that are unaudited for purposes of US GAAP as presented below, not included in this proxy statement/prospectus. Results from interim periods are not necessarily indicative of results that may be expected for the entire year and historical results are not indicative of the results to be expected in the future. The information below is only a summary and should be read in conjunction with the information contained under the headings “Arko’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Information About Arko” and in Arko’s audited consolidated financial statements and unaudited condensed consolidated financial statements and the related notes included elsewhere in this proxy statement/prospectus.

Selected Financial Data

 

    Three months ended
June 30,
    Six months ended
June 30,
    Year ended December 31,  
    2020     2019     2020     2019     2019     2018     2017     2016     2015  
    (in thousands, except per share data)  

Consolidated Statements of Operations Data:

                 

Total revenues

  $ 814,275     $ 1,119,449     $ 1,714,155     $ 2,012,400     $ 4,128,690     $ 4,064,883     $ 3,041,134     $ 2,220,647     $ 1,967,628  

Operating income (loss)

    47,710       7,462       39,726       (2,905     1,324       35,913       20,933       21,464       18,408  

Net income (loss)

    32,509       (3,393     19,652       (22,178     (47,162     23,464       739       7,837       3,879  

Net earnings (loss) per share—basic and diluted

    $0.03       $(0.01     $0.01       $(0.02     $(0.06     $0.01       $(0.01     $0.00       $0.00  

 

            As of December 31,  
     As of June 30, 2020      2019      2018      2017      2016      2015  
     (in thousands)  

Balance Sheet Data:

                 

Cash and cash equivalents

   $ 148,621      $ 32,117      $ 29,891      $ 35,215      $ 41,036      $ 11,212  

Total current assets

     399,702        290,111        271,859        248,276        208,911        143,412  

Total assets

     1,911,759        1,847,365        1,028,011        814,922        730,928        417,583  

Long-term debt, net

     316,699        218,680        180,605        134,873        154,352        102,165  

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF HAYMAKER

The following tables contain selected historical financial data for Haymaker as of and for the three months ended June 30, 2020, as of and for the six months ended June 30, 2020, for the period from February 13, 2019 (inception) through June 30, 2019, and as of and for the period from February 13, 2019 (inception) through December 31, 2019. Such data as of and for the three months ended June 30, 2020 as of and for the six months ended June 30, 2020, and for the period from February 13, 2019 (inception) through June 30, 2019 have been derived from the unaudited interim financial statements of Haymaker included elsewhere in this proxy statement/prospectus. Such data for the period as of and from February 13, 2019 (inception) through December 31, 2019 have been derived from the audited financial statements of Haymaker included elsewhere in this proxy statement/prospectus.

The selected historical financial data of Haymaker as of and for the three months ended June 30, 2020, as of and for the six months ended June 30, 2020, for the period from February 13, 2019 (inception) through June 30, 2019, and as of and for the period from February 13, 2019 (inception) through December 31, 2019 are not intended to be an indicator of Haymaker’s financial condition or results of operations in the future.

The information below is only a summary and should be read in conjunction with the section entitled “Haymaker Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Haymaker’s audited and unaudited interim financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement/prospectus.

 

     For the Three
Months

Ended
June 30, 2020
    For the Six Months
Ended

June 30, 2020
    For the Period from
February 13, 2019
(inception) to
June 30, 2019
    For the Period from
February 13, 2019
(inception) to
December 31, 2019
 
     (unaudited)     (unaudited)     (unaudited)        

Statement of Operations Data:

        

Operating costs and formation costs

   $ 310, 853     $ 626,526     $ 52,114     $ 567,808  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (310,853     (626,526     (52,114     (567,808

Other income

        

Interest Income

     431,730       2,023,008       432,440       4,311,667  

Unrealized gain (loss) on securities held in Trust Account

     (205,945     (39,612     50,143       51,053  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income, net

     225,785       1,983,396       482,583       4,362,720  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before provision for income taxes

     (84,798     1,356,870       430,439       3,794,912  

Provision for Income Taxes

     (25,441     (293,261     (90,392     (796,931
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (110,239   $ 1,063,609     $ 340,047     $ 2,997,981  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding, basic and diluted(1)

     11,899,820       11,891,709       7,236,612       9,551,583  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share

   $ (0.02   $ (0.03   $ (0.00   $ (0.03
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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     As of June 30, 2020      As of
December 31, 2019
 
     (unaudited)         

Balance Sheet Data (end of period):

     

Working Capital(1)

   $ 518,751      $ 108,952  

Total assets

     405,681,165        405,374,549  

Total liabilities

     15,156,604        15,913,597  

Common stock subject to possible redemption

     385,524,560        384,460,951  

Stockholders’ Equity

     5,000,001        5,000,001  

 

     For the Six Months
Ended
June 30, 2020
    For the Period from
February 13, 2019
(inception) to
June 30, 2019
    For the Period from
February 13, 2019
(inception) to
December 31, 2019
 
     (unaudited)     (unaudited)        

Cash Flow Data:

      

Net cash used in operating activities

   $ (1,704,462     (211,458   $ (646,044

Net cash provided (used) in investing activities

     1,359,327       (400,000,000     (400,000,000

Net cash provided by financing activities

     —         401,462,970       401,462,970  

 

(1)

Working capital calculated as current assets less current liabilities.

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information (the “summary pro forma data”) gives effect to the reverse recapitalization of Arko by New Parent and Haymaker as described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The Business Combination will be accounted for as a reverse merger, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, New Parent will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of issuing shares for the net assets of Haymaker, accompanied by a recapitalization. The net assets of New Parent and Haymaker will be stated at historical cost, with no goodwill or other intangible assets recorded. The summary unaudited pro forma condensed combined balance sheet data as of June 30, 2020 gives effect to the Business Combination and financing activities described above as if they had occurred on June 30, 2020. The summary unaudited pro forma condensed combined statement of operations data for the six months ended June 30, 2020 and for the year ended December 31, 2019 give effect to the Business Combination and financing activities described above as if they had occurred on January 1, 2019.

The summary pro forma data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information (the “Pro Forma Financial Statements”) of Haymaker and Arko appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the Pro Forma Financial Statements. In addition, the pro forma financial statements were based on, and should be read in conjunction with, the historical consolidated financial statements and related notes of the entities for the applicable periods included in this proxy statement/prospectus. The summary unaudited pro forma data has been presented for informational purposes only and are not necessarily indicative of what the combined financial position or results of operations actually would have been had the Business Combination been completed as of the dates indicated. The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the Business Combination. In addition, the summary unaudited pro forma data does not purport to project the future financial position or operating results of Haymaker and Arko subsequent to the close of the Business Combination.

Maximum Share Consideration

 

     As of June 30, 2020  
     Assuming No
Redemption
     Assuming
Maximum
Redemption(1)
 
     (in thousands)  

Summary Unaudited Pro Forma Combined Balance Sheet Data

     

Total assets

   $ 2,214,049      $ 2,085,966  

Total liabilities

   $ 1,679,288      $ 1,679,288  

Total equity

   $ 534,761      $ 406,678  

Maximum Cash Consideration

 

     As of June 30, 2020  
     Assuming No
Redemption
     Assuming
Maximum
Redemption(1)
 
     (in thousands)  

Summary Unaudited Pro Forma Combined Balance Sheet Data

     

Total assets

   $ 2,114,004      $ 1,985,921  

Total liabilities

   $ 1,679,288      $ 1,679,288  

Total equity

   $ 434,716      $ 306,633  

 

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     Assuming No Redemption     Assuming Maximum Redemption(1)  
     For the six
months ended
June 30, 2020
     For the year ended
December 31, 2019
    For the six
months ended
June 30, 2020
     For the year ended
December 31, 2019
 
     (in thousands, except share and per share data)  

Summary Unaudited Pro Forma Condensed Combined Statement of Operations

          

Revenue

   $ 1,714,155      $ 4,128,690     $ 1,714,155      $ 4,128,690  

Assuming no cash consideration

          

Weighted average shares outstanding, basic

     150,500,000        150,500,000       137,614,799        137,614,799  

Weighted average shares outstanding, diluted

     151,137,174        150,500,000       138,251,973        137,614,799  

Basic net income (loss) per common share

   $ 0.09      $ (0.35   $ 0.10      $ (0.38

Diluted net income (loss) per common share

   $ 0.09      $ (0.35   $ 0.10      $ (0.38

Assuming max cash consideration

          

Weighted average shares outstanding, basic

     138,730,042        138,730,042       125,844,841        125,844,841  

Weighted average shares outstanding, diluted

     139,367,216        138,730,042       126,482,014        125,844,841  

Basic net income (loss) per common share

   $ 0.10      $ (0.38   $ 0.11      $ (0.42

Diluted net income (loss) per common share

   $ 0.10      $ (0.38   $ 0.11      $ (0.42

 

(1)

This presentation gives effect to Haymaker public shareholders redeeming approximately 12.9 million shares for aggregate redemption payments of $130.5 million. Aggregate redemption payments of $130.5 million calculated as the difference between (i) $405.0 million available trust cash and $0.5 million of funds held outside the trust and (ii) $275.0 million required available minimum cash. The number of public redemption shares of approximately 12.9 million shares was calculated based on the estimated per share redemption value of $10.13 ($405.0 million in trust account divided by 40.0 million outstanding Haymaker public shares).

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

our ability to consummate the Business Combination, of if we do not consummate such Business Combination, any other initial business combination;

 

   

the expected benefits of the Business Combination;

 

   

satisfaction of conditions to the Business Combination, including the availability of at least $275 million of cash in the Trust Account (and/or from other specified sources, if necessary), after giving effect to redemptions of shares of Haymaker Class A Common Stock;

 

   

New Parent’s public securities’ potential liquidity and trading;

 

   

New Parent’s financial and business performance following the Business Combination, including financial projections and business metrics;

 

   

New Parent’s business, expansion plans, opportunities and prospects;

 

   

expectations regarding the time during which we will be an emerging growth company under the JOBS Act; and

 

   

New Parent’s future capital requirements and sources and uses of cash;

 

   

New Parent’s ability to raise financing in the future; and

 

   

GPM’s success in retaining or recruiting, or changes required in, its officers, key employees or directors following the completion of the Business Combination.

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement/prospectus. As a result of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

   

the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement;

 

   

the outcome of any legal proceedings that may be instituted against Haymaker following announcement of the proposed Business Combination and transactions contemplated thereby;

 

   

the inability to complete the Business Combination due to the failure to obtain approval of the stockholders of Haymaker or the shareholders of Arko or to satisfy other conditions to the Closing in the Business Combination Agreement;

 

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the number of shares submitted for redemption by Haymaker’s stockholders in connection with the stockholder meeting to approve the proposed transaction;

 

   

the inability to obtain or maintain the listing of shares of New Parent Common Stock and New Parent Warrants on Nasdaq following the Business Combination;

 

   

the risk that the proposed Business Combination disrupts current plans and operations of Arko as a result of the announcement and consummation of the transactions described herein;

 

   

our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Arko and GPM to grow and manage growth profitably and retain its key employees following the Business Combination;

 

   

costs related to the Business Combination;

 

   

changes in applicable laws or regulations;

 

   

the effect of the COVID-19 pandemic on (x) the ability to consummate the Business Combination and (y) the business of GPM;

 

   

risks and uncertainties related to Arko’s business, including, but not limited to, changes in petroleum prices, the impact of competition, environmental risks, restrictions on the sale of alcohol, cigarettes, vaping products, and other tobacco products and increases in their prices, dependency on suppliers, increases in fuel efficiency and demand for alternative fuels for electric vehicles, failure by independent outsider operators to meet their obligations, acquisition and integration risks, currency exchange and interest rate risks, the failure to realize the expected benefits of the acquisition of Empire, the failure to promptly and effectively integrate Empire’s business, and the potential for unknown or inestimable liabilities related to the Empire business;

 

   

the receipt of an unsolicited offer from another party for an alternative business transaction that could interfere with the proposed transaction;

 

   

New Parent’s, and its wholly-owned subsidiary, GPM’s, ability to raise capital;

 

   

the possibility that Haymaker or Arko and GPM may be adversely affected by other economic, business, and/or competitive factors; and

 

   

other risks and uncertainties described in this proxy statement/prospectus, including those under the section entitled “Risk Factors.”

 

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RISK FACTORS

New Parent will face a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of stock. In addition, you should read and consider the risks associated with the business of Haymaker because these risks may also affect New Parent, and its wholly-owned subsidiary, GPM—these risks can be found in Haymaker’s Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, all of which are filed with the SEC. You should also read and consider the other information in this proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” in this proxy statement/prospectus.

Risks Related to Arko’s Business and Industry

Prior to the closing of the Business Combination, Arko, a holding company, holds a majority of the outstanding equity of GPM, which is the entity responsible for operating the business described in “Information About Arko.” Following the closing of the Business Combination, both Arko and GPM will be indirect wholly-owned subsidiaries of New Parent. Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to Arko and its subsidiaries (including GPM) prior to the consummation of the Business Combination.

Changes in economic conditions and consumer confidence in the U.S. could adversely affect GPM’s business.

GPM’s operations and the scope of services it provides are affected by changes in the macro-economic situation in the United States, which has a direct impact on consumer confidence and spending patterns. A number of key macro-economic factors, such as rising interest rates, inflation and unemployment, could have a negative effect on consumer habits and spending, and lead to lower demand for fuel and other products sold at GPM convenience stores and gas stations. Significant negative developments in the macro-economic environment in the United States could have a material adverse effect on GPM’s business, financial condition and results of operations.

If GPM does not make acquisitions on economically acceptable terms, its future growth may be limited. Furthermore, any acquisitions GPM completes are subject to substantial risks that could result in losses.

GPM’s ability to grow depends substantially on its ability to make acquisitions. GPM intends to expand its retail business and dealer distribution network through acquisitions. However, GPM may be unable to take advantage of accretive opportunities for any of the following reasons:

 

   

GPM is unable to identify attractive acquisition opportunities or negotiate acceptable terms for acquisitions;

 

   

GPM is unable to reach an agreement regarding the terms of pursued acquisitions;

 

   

GPM is unable to raise financing for such acquisitions on economically acceptable terms; or

 

   

GPM is outbid by competitors.

If GPM is unable to make acquisitions, the future growth of GPM will be limited. In addition, if GPM completes any future acquisitions, its capitalization and results of operations may change significantly. GPM may complete acquisitions, which, contrary to GPM’s expectations, ultimately prove to not be accretive. If any of these events were to occur, GPM’s future growth would be limited.

GPM may make acquisitions that it believes are beneficial, which ultimately result in negative financial consequences. Any acquisition involves potential risks, including, among other things:

 

   

GPM may not be able to successfully integrate the businesses it acquires;

 

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GPM may not be able to achieve the anticipated synergies and financial improvements from the acquired businesses;

 

   

GPM may not be able to retain key locations from the acquired businesses;

 

   

GPM may be unable to discover material liabilities of businesses that it acquires;

 

   

acquisitions may divert the attention of senior management from focusing on GPM’s day-to-day operations;

 

   

GPM may experience a decrease in liquidity resulting from its use of a significant portion of cash available for investment or borrowing capacity to finance acquisitions;

 

   

substantial investments in financial controls, information systems, management resources and human resources may be required in order to support future growth; and

 

   

GPM may have difficulties in obtaining the required approvals, permits, licenses and consents for the acquired sites.

GPM may be unable to successfully integrate Empire’s operations or otherwise realize the expected benefits from the Empire transaction, which could adversely affect the expected benefits from the Empire transaction and GPM’s results of operations and financial condition.

The Empire transaction involves the integration of the business of two companies that have previously operated independently. The difficulties of combining the operations of the two businesses include:

 

   

integrating personnel with diverse business backgrounds;

 

   

converting customers to new systems;

 

   

combining different corporate cultures; and

 

   

retaining key employees

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the business and the loss of key personnel. The integration will require the experience and expertise of certain key employees of Empire retained by GPM. GPM may not be successful in retaining these employees for the full time period necessary to successfully integrate Empire’s operations with those of GPM. The diversion of management’s attention and any delay or difficulty encountered in connection with the integration of the two companies’ operations could have an adverse effect on the business and results of operations of GPM.

The success of the Empire transaction will depend, in part, on GPM’s ability to realize the anticipated benefits from combining the business of Empire with GPM. If GPM is unable to successfully integrate Empire, the anticipated benefits of the Empire transaction may not be realized fully or may take longer to realize than expected. For example, GPM may fail to realize the anticipated increase in earnings anticipated to be derived from the Empire transaction. In addition, as with regard to any acquisition, a significant decline in asset valuations or cash flows may also cause GPM not to realize expected benefits.

GPM’s future growth depends on its ability to successfully implement its organic growth strategy, a major part of which consists of remodeling its convenience stores.

A major part of GPM’s organic growth strategy consists of remodeling its convenience stores in order to improve customers’ shopping experience by offering high-quality, convenient and efficient facilities. Such large-scale remodeling projects entail significant risks, including shortages of materials or skilled labor, unforeseen engineering, environmental and/or geological problems, work stoppages, weather interference, unanticipated cost increases and non-availability of construction equipment. Such risks, in addition to potential difficulties in obtaining any required licenses and permits, could lead to significant cost increases and substantial delays in the

 

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opening of the remodeled convenience stores. Historically, GPM has grown through acquisitions and has not previously undertaken such large-scale remodeling projects. Accordingly, there can be no assurance that GPM will be able to achieve its growth targets by successfully implementing this strategy.

Significant changes in current consumption of tobacco and nicotine products could adversely affect GPM’s business.

Tobacco and nicotine products, which accounted for approximately 16% of GPM’s total net sales for the fiscal year ended December 31, 2019, are a significant revenue source for GPM. Significant increases in wholesale cigarette prices, current and future tobacco legislation, including restrictions or bans on flavored tobacco products, national, state and local campaigns to discourage smoking, reductions in manufacturer rebates for the purchase of tobacco products and increases in taxes on cigarettes and other tobacco products could have a material adverse effect on the demand for tobacco products and, in turn, on GPM’s financial condition and results of operations.

GPM’s financial condition and results of operations are influenced by changes in the wholesale prices of motor fuel, which may adversely impact GPM’s sales, customers’ financial condition and the availability of trade credit.

During the fiscal year ended December 31, 2019, fuel sales were approximately 65% of GPM’s total net sales and 34% of its gross profit, each of which will increase as a result of the acquisition of the business of Empire. Historically, GPM has not carried inventory on hand for more than five days in the ordinary course of its business and has not engaged in hedging transactions. GPM’s operating results are influenced by prices for motor fuel, variable retail margins and the market for such products. Crude oil and domestic wholesale motor fuel

markets are volatile. General political conditions, acts of war or terrorism and instability in oil producing regions, particularly in the Middle East, Russia, Africa and South America, could significantly impact crude oil supplies and wholesale fuel prices. Significant increases and volatility in wholesale fuel prices could result in substantial increases in the retail price of motor fuel products, lower fuel gross margin per gallon, lower demand for such products and lower sales to consumers and dealers. This volatility makes it extremely difficult to predict the impact future wholesale cost fluctuations will have on GPM’s financial condition and results of operations. Increases in fuel prices compress retail fuel margin because fuel costs typically increase faster than retailers are able to pass them along to customers. In addition, when prices for motor fuel rise, some of GPM’s fuel distributor customers may have insufficient credit to purchase motor fuel from GPM at their historical volumes. Furthermore, as motor fuel prices decrease, so do prompt payment incentives, which are generally calculated as a percentage of the total purchase price of the motor fuel distributed. Finally, higher prices for motor fuel may reduce GPM’s access to trade credit or worsen the terms under which such credit is available to GPM.

Significant changes in demand for fuel-based modes of transportation could adversely affect GPM’s business.

The road transportation fuel and convenience business is generally driven by consumer preferences, growth of road traffic and trends in travel and tourism. A number of key factors could impact current customer behavior and trends with respect to road transportation and fuel consumption. These include new technologies providing increased access to non-fuel dependent means of transportation, legislation and regulations focused on fuel efficiency and lower fuel consumption, and the public’s general approach with regard to climate change and the effects of greenhouse gas emissions. Significant developments in any of the above-listed factors could lead to substantial changes in the demand for petroleum-based fuel and have a material adverse effect on GPM’s business, financial condition and results of operations.

GPM operates in a highly competitive industry characterized by low entry barriers.

GPM competes with other convenience stores, gas stations, large and small food retailers, quick service restaurants and dollar stores. Since all such competitors offer products and services that are very similar to those offered by GPM, a number of key factors determine GPM’s ability to successfully compete in the marketplace. These include the location of stores, competitive pricing, convenient access routes, the quality and configuration

 

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of stores and fueling facilities, and a high level of service. In particular, large convenience store chains have expanded their number of locations and remodeled their existing locations in recent years, enhancing their competitive position. In addition, some of GPM’s competitors have greater financial resources and scale than GPM, which may provide them with competitive advantages in negotiating fuel and other supply arrangements. GPM’s inability to successfully compete in the marketplace by continuously meeting customer requirements concerning price, quality and service level could adversely affect its business, financial condition and results of operations.

Negative events or developments associated with branded motor fuel suppliers could have an adverse impact on GPM’s revenues.

The success of GPM’s operations is dependent, in part, on the continuing favorable reputation, market value and name recognition associated with the motor fuel brands sold at GPM-controlled gas stations and to independent and lessee dealers. An event which adversely affects the value of those brands could have a negative impact on the volumes of motor fuel GPM distributes, which in turn could have a material adverse effect on GPM’s business, financial condition and results of operations.

GPM depends on four principal suppliers for the majority of its gross fuel purchases and two suppliers for merchandise. A failure by a principal supplier to renew its supply agreement, a disruption in supply or an unexpected change in supplier relationships could have a material adverse effect on GPM’s business.

For the fiscal year ended December 31, 2019, Valero Marketing and Supply Company supplied approximately 21%, Marathon Petroleum Company LP (“Marathon Petroleum”) supplied approximately 21%, BP Products North America Inc. (“BP North America”) supplied approximately 15% and Equilon Enterprises LLC DBA Shell Oil Products US (“Shell”) supplied approximately 16% of GPM’s gross fuel purchases, respectively. GPM’s supply agreement with Valero Marketing expires in March 2026, GPM’s supply agreement with Marathon Petroleum expires in June 2023, GPM’s supply agreement with BP North America expires in December 2022 and GPM’s supply agreement with Shell expires in August 2023. If any of Valero Marketing, Marathon Petroleum, BP North America or Shell elects not to renew its contracts with GPM, GPM may be unable to replace the volume of motor fuel it currently purchases from such supplier on similar terms or at all. GPM relies upon its suppliers to timely provide the volumes and types of motor fuels for which they contract. GPM purchases motor fuels from a variety of suppliers under term contracts. In times of extreme market demand or supply disruption, GPM may be unable to acquire enough fuel to satisfy the demand of its customers. Any disruption in supply or a significant change in GPM’s relationship with its principal fuel suppliers could have a material adverse effect on GPM’s business, financial condition and results of operations.

GPM depends on two major vendors, Core-Mark and Grocery Supply Company, to supply a majority of its in-store merchandise. A significant disruption or operational failure affecting the operations of Core-Mark or Grocery Supply Company could materially impact the availability, quality and price of products sold at GPM convenience stores and gas stations, cause GPM to incur substantial unanticipated costs and expenses, and adversely affect its business, financial condition and results of operations.

A majority of GPM’s revenue is generated under fuel supply agreements that must be renegotiated or replaced periodically. If GPM is unable to successfully renegotiate or replace these agreements, then GPM’s results of operations, financial condition and ability to make distributions to our stockholders could be adversely affected.

A majority of GPM’s revenue is generated under fuel supply agreements with independent dealers. As these supply agreements expire, they must be renegotiated or replaced. GPM’s fuel supply agreements generally have an initial term of 10 years and, as of September 30, 2020, had a volume-weighted average remaining term of approximately 6.0 years. GPM’s dealers have no obligation to renew their fuel supply agreements with GPM on similar terms or at all.

 

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GPM may be unable to renegotiate or replace its fuel supply agreements when they expire, and the terms of any renegotiated fuel supply agreements may not be as favorable as the terms of the agreements they replace. Whether these fuel supply agreements are successfully renegotiated or replaced is frequently subject to factors beyond GPM’s control. Such factors include fluctuations in motor fuel prices, a dealer’s ability to pay for or accept the contracted volumes and a competitive marketplace for the services offered by GPM. If GPM cannot successfully renegotiate or replace its fuel supply agreements or must renegotiate or replace them on less favorable terms, revenues from these arrangements could decline and our results of operations, financial condition and ability to make distributions to our stockholders could be adversely affected.

The retail sale, distribution and storage of motor fuels is subject to environmental protection and operational safety laws and regulations that may expose GPM or its customers to significant costs and liabilities, which could have a material adverse effect on GPM’s business.

GPM and its facilities and operations are subject to various federal, state and local environmental, health and safety laws, and regulations. These laws and regulations continue to evolve and are expected to increase in both number and complexity over time and govern not only the manner in which GPM conducts its operations, but also the products it sells. For example, international agreements and national, regional, and state legislation and regulatory measures that aim to limit or reduce greenhouse gas emissions or otherwise address climate change are currently in various stages of implementation. There are inherent risks of increasingly restrictive environmental and other regulation that could materially impact GPM’s results of operations or financial condition. Most of the costs of complying with existing laws and regulations pertaining to GPM’s operations and products are embedded in the normal costs of doing business. However, it is not possible to predict with certainty the amount of additional investments in new or existing technology or facilities or the amounts of increased operating costs to be incurred in the future to prevent, control, reduce or eliminate releases of hazardous materials or other pollutants into the environment; remediate and restore areas damaged by prior releases of

hazardous materials; or comply with new or changed environmental laws or regulations. Although these costs may be significant to the results of operations, GPM does not presently expect them to have a material adverse effect on GPM’s liquidity or financial position. Accidental leaks and spills requiring cleanup may occur in the ordinary course of business. GPM may incur expenses for corrective actions or environmental investigations at various owned and previously owned facilities or leased or previously leased and at third-party-owned waste disposal sites used by GPM. An obligation may arise when operations are closed or sold or at non-GPM sites where company products have been handled or disposed of. Expenditures to fulfill these obligations may relate to facilities and sites where past operations followed practices and procedures that were considered acceptable at the time but may require investigative or remedial work or both to meet current or future standards.

GPM’s business involves the purchase of motor fuels for retail sale and wholesale distribution to customers, including third-party sub-wholesalers and bulk purchasers. GPM’s share of the motor fuels is distributed to GPM-controlled convenience stores, independent and lessee dealers and consignment locations, whereas the third-party sub-wholesalers’ share is generally distributed to convenience stores and the bulk purchasers’ share is generally retained for their own use. GPM does not physically transport any of the motor fuels. Rather, third-party transporters distribute the motor fuels.

The transportation of motor fuels by third-party transporters, as well as the associated storage of such fuels at locations including convenience stores, are subject to various federal, state and local environmental laws and regulations, including those relating to ownership and operation of underground storage tanks, the release or discharge of regulated materials into the air, water and soil, the generation, storage, handling, use, transportation and disposal of hazardous materials, the exposure of persons to regulated materials, and the health and safety of employees dedicated to such transportation and storage activities. These laws and regulations may impose numerous obligations and restrictions that are applicable to motor fuels transportation and storage and other related activities, including acquisition of, or applications for, permits, licenses, or other approvals before conducting regulated activities; restrictions on the quality and labeling of the motor fuels that may be sold; restrictions on the types, quantities and concentration of materials that may be released into the environment;

 

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required capital expenditures to comply with pollution control requirements; and imposition of substantial liabilities for pollution or non-compliance resulting from these activities. Numerous governmental authorities, such as the U.S. Environmental Protection Agency (the “EPA”), and analogous state agencies, have the power to monitor and enforce compliance with these laws and regulations and the permits, licenses and approvals issued under them, including fines, which can result in increased pollution control equipment costs or other actions. Failure to comply with these existing laws and regulations, or any newly adopted laws or regulations, may trigger administrative, civil or criminal enforcement measures, including the assessment of monetary penalties or other sanctions, the imposition of investigative, remedial or corrective action obligations, the imposition of additional compliance requirements on certain operations or the issuance of orders enjoining certain operations. Moreover, the trend in environmental regulation is for more restrictions and limitations on activities that may adversely affect the environment, the occurrence of which may result in increased costs of compliance.

Where releases of motor fuels or other substances or wastes have occurred, federal and state laws and regulations require that contamination caused by such releases be assessed and remediated to meet applicable clean-up standards. Certain environmental laws impose strict, joint and several liability for costs required to clean-up and restore sites where motor fuels or other waste products have been disposed or otherwise released. The costs associated with the investigation and remediation of contamination, as well as any associated third-party claims for damages or to impose corrective action obligations, could be substantial and could have a material adverse effect on GPM or its customers who transport motor fuels or own or operate convenience stores or other facilities where motor fuels are stored. While GPM has no plans to transport or store the motor fuels it distributes, if GPM were ever to conduct activities that resulted in it being legally characterized as a transporter of motor fuels, or if it were ever held under applicable law to have negligently entrusted these transportation or any storage duties to a third party, then GPM, too, could be subject to some or all of these costs and liabilities, which could have a material adverse effect on GPM’s business, financial condition and results of operations.

For more information on potential risks arising from environmental and occupational safety and health laws and regulations, please see “GPM’s Business—Government Regulation.”

Business disruption and related risks resulting from the recent outbreak of COVID-19 could have a material adverse effect on GPM’s business and results of operations.

In December 2019, Chinese officials reported a novel coronavirus (“COVID-19”) outbreak. COVID-19 has since spread throughout the world, leading the World Health Organization to declare on March 11, 2020, that COVID-19 reached the magnitude of a global pandemic. The rapid spread of COVID-19 throughout the U.S. led federal, state and local governments to take significant steps in an attempt to reduce exposure to COVID-19 and control its negative effects on public health and the U.S. economy. Such governmental measures remain ongoing. The ultimate duration and severity of COVID-19 remain uncertain, however, a substantial and continuous deterioration in the business environment in the United States could have a material adverse effect on GPM’s business, financial condition and results of operations, including:

 

   

Significant reductions or volatility in demand for products sold at GPM convenience stores and gas stations due to substantially lower customer traffic resulting from travel restrictions and/or social distancing measures;

 

   

Significant disruptions, or even a complete shutdown, of some or all of GPM’s operations as a result of government-imposed restrictions on customers and/or GPM employees;

 

   

Temporary or long-term disruptions to GPM’s supply chain in connection with the pandemic’s impact on GPM’s network of suppliers and distributors, significantly impacting the quality, variety and pricing of merchandise sold at GPM sites;

 

   

Limitation on employee availability and restrictions on the sale and pricing of certain products;

 

   

Cost to comply with constantly evolving laws and regulations related to COVID-19, including additional cleaning and protective equipment for employees;

 

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Store closures and reduction of store capacity because of local outbreaks of COVID-19 resulting in reduced sales of merchandise and fuel;

 

   

Significant delays in the import of certain products, including essential products expected to sell at an increased volume in connection with COVID-19;

 

   

Changes to our competitors’ service offerings, including delivery and drive-through options, which GPM offers on a limited basis; and

 

   

Reduced value of newly acquired stores as they experience reduced sales compared to the time of acquisition.

Advancements in technologies that significantly reduce fuel consumption could adversely affect GPM’s business.

Fuel competes with other sources of energy, some of which are less costly on an equivalent energy basis. There have been significant governmental incentives and consumer pressures to increase the use of alternative fuels in the United States. A number of automotive, industrial and power generation manufacturers are developing more fuel-efficient engines, hybrid engines and alternative clean power systems. In 2019, hybrid and electric vehicles accounted for approximately 1.9% of all automotive sales in the United States. The more successful and widespread these alternatives become, as a result of governmental incentives or regulations, technological advances, consumer demand, improved pricing or otherwise, the greater the potential negative impact on the demand, pricing and profitability of our fuel-based products and services.

Failure to comply with applicable laws and regulations could result in liabilities, penalties or costs that could have a material adverse effect on GPM’s business.

GPM’s operations are subject to numerous federal, state and local laws and regulations, including regulations related to the sale of alcohol, tobacco, nicotine products, lottery/lotto products and other age-restricted products, various food safety and product quality requirements, environmental laws and regulations, and various employment and tax laws. We expect that there will be frequent changes and variation in local and state regulations in response to COVID-19, including the regulation of in-house dining and capacity restrictions, which vary by jurisdiction and locality. GPM will be required to devote substantial resources in order to comply with this changing regulatory environment and will be required to implement compliance protocols that will vary based on local requirements and regulations.

GPM’s violation of, or inability to comply with, state laws and regulations concerning the sale of alcohol, tobacco, nicotine products, lottery/lotto products and other age-restricted products could expose GPM to regulatory sanctions ranging from monetary fines to the revocation or suspension of GPM’s permits and licenses for the sale of such products. Such regulatory action could adversely affect GPM’s business, financial condition and results of operations.

GPM’s failure to comply with applicable labor and employment laws pertaining to, among others, minimum wage, mandated healthcare benefits or paid time-off benefits could result in increased regulatory scrutiny, monetary fines and substantial costs and expenses related to legal proceedings.

GPM’s business, particularly the operation of gas stations, and the storage and transportation of fuel products, is directly affected by numerous environmental laws and regulations in the United States pertaining, in particular, to the quality of fuel products, the handling and disposal of hazardous wastes and the prevention and remediation of environmental contaminations. Such laws and regulations are constantly evolving and have generally become more stringent over time. GPM’s compliance with such evolving regulation requires significant and continuously increasing capital expenditures. GPM’s business may also be (indirectly) affected by the adoption of environmental laws and regulations intended to address global climate change by limiting carbon

 

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emissions and introducing more stringent requirements for the exploration, drilling and transportation of crude oil and petroleum products. Increasingly wide-spread implementation of such laws and regulations may lead to a significant increase in the cost of petroleum-based fuels and, in turn, lower demand for road transportation fuel. GPM’s failure to comply with applicable environmental laws and regulations, or a significant contamination at one of its sites requiring remediation of contaminated soil and groundwater on a large scale, could expose GPM to substantial fines and penalties, as well as administrative, civil and criminal charges, all of which could have a material adverse effect on GPM’s business, reputation, financial condition and results of operations.

GPM is subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, fuel excise taxes, sales and use taxes, payroll taxes, franchise taxes, property taxes and tobacco taxes. Many of these tax liabilities are subject to periodic audits by the respective taxing authorities. Substantial changes or reforms in the current tax regime could result in increased tax expenses and potentially have a material adverse effect on GPM’s financial condition and results of operations.

Substantial management turnover could adversely affect GPM’s business.

GPM is currently managed by a group of experienced senior executives with substantial knowledge and understanding of the industry in which it operates. GPM’s inability to retain its senior management, adequately replace any member of its management team in case of departure or identify and recruit highly qualified individuals for future management positions, could adversely affect GPM’s business, reputation and results of operations. Uncertainty about the effect of the Business Combination on GPM’s business, employees, customers, third parties with whom GPM has relationships, and other third parties, including regulators, may have an adverse effect on New Parent. These uncertainties may impair New Parent’s ability to attract, retain and motivate key personnel for a period of time after the Business Combination. If key GPM employees depart because of uncertainty related to the Business Combination or a desire not to remain with New Parent, GPM’s business could be harmed.

The failure to recruit or retain qualified personnel could adversely affect GPM’s business.

GPM is dependent on its ability to recruit and retain qualified individuals to work in and manage its convenience stores, and its operations are subject to federal and state laws governing such matters as minimum wages, overtime, working conditions and employment eligibility requirements. Economic factors, such as a decrease in unemployment and an increase in mandatory minimum wages and social benefits, could have a material impact on GPM’s results of operations if GPM is required to significantly increase its wages and benefits expenditures in order to attract and retain qualified personnel. At the state and local levels, there are proposals currently under consideration to increase minimum wage rates. In 2019, efforts were put forth by the U.S. federal government to increase the federal minimum wage to $15 per hour, instead of the current rate of $7.25 per hour. Such an increase could have a material impact on GPM’s results of operations. However, no such legislation has been enacted at this time. Additionally, the ongoing impact of the COVID-19 pandemic could impact GPM’s ability to recruit and retain qualified personnel.

Unfavorable weather conditions could adversely affect GPM’s business.

Weather conditions have a significant effect on GPM’s sales, as retail customer transactions in higher profit margin products generally increase when weather conditions are favorable. Consequently, GPM’s results are seasonal, and GPM typically earns more during the warmer second and third quarters of the year. Severe weather phenomena, such as hurricanes, during those quarters may adversely affect GPM’s results of operations. In addition, severe weather conditions could result in significant damage to GPM gas stations, convenience stores and infrastructure, potentially resulting in substantial costs and expenses.

GPM may be held liable for fraudulent credit card transactions on its fuel dispensers.

Europay, MasterCard and Visa, or EMV, is a global standard for credit cards that uses computer chips to authenticate and secure chip-card transactions. The liability for fraudulent credit card transactions shifted from

 

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the credit card processor to GPM in October 2015 for transactions processed inside the convenience stores (although due to the unavailability of the correct software from branded fuel suppliers, certain of such suppliers have retained certain associated liabilities) and will shift to GPM in April 2021 for transactions at the fuel dispensers. In connection with incentive funds provided by fuel suppliers, GPM is actively upgrading its point-of-sale machines and fuel dispensers to be EMV-compliant at the fuel dispenser. GPM has upgraded all of its inside point-of-sale machines to be EMV-compliant and is in the process of upgrading its fuel dispensers to be EMV-compliant (approximately 20-25% of retail locations are expected to be upgraded by the end of 2020). Due to the unavailability of the correct software from branded fuel suppliers and the cost to upgrade each site, GPM does not expect to upgrade all of its sites prior to April 2021 and accordingly, may be subject to liability for fraudulent credit card transactions processed at fuel dispensers.

Significant disruptions of GPM’s information technology systems or breaches of its data security could adversely affect its business.

GPM relies on multiple information technology systems and a number of third-party vendor platforms (collectively, “IT Systems”) in order to run and manage its daily operations. Such IT Systems allow GPM to manage various aspects of its business and to provide reliable analytical information to its management. IT Systems are vulnerable to, among other things, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of access to data and information, security breaches or other security incidents, and computer viruses or attacks. A serious, long-lasting disruption of GPM’s IT Systems could lead to the breakdown of critical operations and financial reporting systems, and have a material adverse effect on GPM’s business, reputation, financial condition and results of operation.

As a fuel and merchandise retailer, GPM collects and stores large amounts of data on its network, including personal data from customers, as well as other sensitive information concerning its employees, business partners and vendors. A breakdown or breach of GPM’s IT Systems could result in the unauthorized release of such personal and sensitive information. Although GPM has invested in measures to reduce these risks, it cannot guarantee that such measures will be successful in preventing compromise and/or disruption of its IT Systems and related data. An unauthorized release of personal data and other sensitive information resulting from a breakdown or breach of GPM’s IT Systems could expose it to significant costs and expenses, regulatory investigations and penalties, and potential lawsuits, all of which could have a material adverse effect on GPM’s reputation, financial condition and results of operations.

GPM depends on third-party transportation providers for the transportation of all of its motor fuel. Thus, a change of providers or a significant change in GPM’s relationship with these providers could have a material adverse effect on GPM’s business.

All of the motor fuel GPM distributes is transported from terminals to gas stations by third-party transportation providers. Such providers may suspend, reduce or terminate their obligations to GPM if certain events (such as force majeure) occur. A change of key transportation providers, a disruption or cessation in services provided by such providers or a significant change in GPM’s relationship with such providers could have a material adverse effect on GPM’s business, financial condition and results of operations.

GPM’s operations present risks which may not be fully covered by insurance.

GPM carries comprehensive insurance against the hazards and risks underlying its operations. GPM believes its insurance policies are customary in the industry; however, some losses and liabilities associated with its operations may not be covered by its insurance policies. In addition, there can be no assurance that GPM will be able to obtain similar insurance coverage on favorable terms (or at all) in the future. Significant uninsured losses and liabilities could have a material adverse effect on GPM’s financial condition and results of operations. Furthermore, GPM’s insurance is subject to high deductibles. As a result, certain large claims, even if covered by

 

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insurance, may require a substantial cash outlay by GPM, which could have a material adverse effect on GPM’s financial condition and results of operations.

Certain provisions in some of GPM’s material agreements could delay or prevent a potential change of control transaction.

Certain of GPM’s material agreements include provisions subjecting the continuation of such agreements to the counterparties’ consent should Mr. Arie Kotler cease to (directly or indirectly) control, or provide services to, GPM (“Change of Control Provisions”). Such Change of Control provisions may have the effect of delaying or preventing a potential change of control of GPM, as there can be no assurance that the required consents can be obtained on terms satisfactory to Haymaker or any potential acquirer.

GPM’s variable rate debt could adversely affect GPM’s financial condition and results of operations.

Certain of GPM’s outstanding term loans and revolving credit facility bear interest at variable rates, subjecting GPM to fluctuations in the short-term interest rate. As of June 30, 2020, approximately 89% of GPM’s debt bore interest at variable rates, and approximately 96% of GPM’s debt bore interest at variable rates after consummation of the Empire acquisition. Consequently, significant increases in market interest rates would create substantially higher debt service requirements for GPM, which could have a material adverse effect on its overall financial condition, including its ability to service its indebtedness.

GPM’s credit facilities have substantial restrictions and financial covenants that may restrict GPM’s business and financing activities.

GPM depends on the earnings and cash flow generated by its operations in order to meet its debt service obligations. The operating and financial restrictions and covenants in GPM’s credit facilities, and any future financing agreements, may restrict GPM’s ability to finance future operations or expand GPM’s business activities. For example, GPM’s credit facilities restrict its ability to, among other things:

 

   

incur additional debt or issue guarantees;

 

   

incur or permit liens to exist on certain property;

 

   

make certain investments, acquisitions or other restricted payments;

 

   

modify or terminate certain material contracts; and

 

   

merge or dispose of all or substantially all of its assets.

In addition, the credit agreements governing GPM’s credit facilities contain covenants requiring GPM to maintain certain financial ratios. See “Arko Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information about GPM’s credit facilities.

GPM’s ability to comply with these restrictions and covenants is uncertain and will be affected by the levels of cash flow from operations and other events or circumstances beyond GPM’s control. If market or other economic conditions deteriorate, GPM’s ability to comply with these covenants may be impaired. If GPM violates any provisions of its credit facilities that are not cured or waived within the appropriate time periods provided in such credit facilities, a significant portion of GPM’s indebtedness may become immediately due and payable, and GPM’s lenders’ commitment to make further loans to GPM may terminate. GPM might not have, or be able to obtain, sufficient funds to make these accelerated payments.

If GPM were unable to repay the accelerated amounts, its lenders could proceed against the collateral granted to them to secure such debt. If the payment of GPM’s debt is accelerated, its assets may be insufficient to repay such debt in full, which could result in GPM’s insolvency.

 

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The enactment and implementation of derivatives legislation, and the promulgation of regulations pursuant thereto, could have an adverse effect on GPM’s ability to use derivative instruments to reduce the effect of commodity-price, interest-rate, and other risks associated with GPM’s business and increase the working capital requirement to conduct these hedging activities.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted on July 21, 2010, established federal oversight and regulation of the over-the-counter derivatives market and entities that participate in that market. The Dodd-Frank Act requires the Commodities Futures Trading Commission (the “CFTC”) and the SEC to promulgate rules and regulations implementing the Dodd-Frank Act. Although the CFTC has finalized certain regulations, others remain to be finalized or implemented, and it is not possible at this time to predict when this will occur.

The CFTC has designated certain interest-rate swaps and credit-default swaps for mandatory clearing, and the associated rules require GPM, in connection with derivative activities, to comply with clearing and trade-execution requirements or take steps to qualify for an exemption from such requirements. Although GPM would qualify for the end-user exception from the mandatory clearing requirements for swaps entered to hedge certain commercial risks, the application of the mandatory clearing and trade-execution requirements to other market participants, such as swap dealers, may change the cost and availability of the swaps that GPM may use for hedging. In addition, for uncleared swaps, the CFTC or federal banking regulators may require end-users to enter into credit support documentation and/or post initial and variation margin in the future, although current rules do not require GPM’s swap dealer counterparties to collect margin from GPM for hedging transactions that it may engage in. Posting of collateral could impact liquidity and reduce cash available to GPM for capital expenditures, therefore reducing GPM’s ability to enter into derivatives to reduce risk and protect cash flows.

Finally, the Dodd-Frank Act was intended, in part, to reduce the volatility of oil and gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and gas. GPM’s revenues could be adversely affected if a consequence of the Dodd-Frank Act, and related regulations, is lower commodity prices.

The full impact of the Dodd-Frank Act and related regulatory requirements upon GPM’s business will not be known until all regulations are implemented and the market for derivative contracts has adjusted. From GPM’s perspective, the Dodd-Frank Act, and related current and future regulations, could significantly increase the cost of derivative contracts, materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against business risks and reduce the ability to monetize or restructure existing derivative contracts. To date, GPM has engaged in very limited hedging transactions. While we may decide to enter into hedging transactions in the future, the Dodd-Frank Act, and related regulations, may prevent GPM from using derivatives.

In addition to derivatives legislation in the U.S., the European Union and other non-U.S. jurisdictions are implementing regulations with respect to the derivatives market. To the extent GPM transacts with counterparties in foreign jurisdictions, GPM may become subject to such regulations. At this time, the impact of such regulations is not clear.

The proposed phase out of the London Interbank Offered Rate (“LIBOR”) could adversely affect GPM’s results of operations and financial condition.

In 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. In 2019, the Financial Accounting Standards Board proposed guidance that would help facilitate the market transition from existing reference rates to alternative rates, however, there is currently no definitive information regarding the future use of LIBOR or a replacement rate. As of June 30, 2020, approximately 89% of GPM’s debt bore interest at variable rates, and approximately 96% of GPM’s debt bore interest at variable rates after consummation of the Empire acquisition. Most of GPM’s credit

 

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agreements were entered into in 2019 and the beginning of 2020. Such credit agreements include a mechanism, pursuant to which the underlying interest rate shall be determined according to the alternative index replacing LIBOR, as customary in the market at the time. Since there is still great uncertainty in the market with respect to the elimination of LIBOR and the potential transition to a replacement rate, the impact of such changes on GPM’s future debt repayment obligations, results of operations and financial condition remains uncertain.

Terrorist attacks and threatened or actual war may adversely affect GPM’s business.

GPM’s business is affected by general economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of GPM’s control. Terrorist attacks or threats, whether within the U.S. or abroad, rumors or threats of war, actual conflicts involving the U.S. or its allies, or military or trade disruptions impacting GPM suppliers or customers may adversely impact GPM’s operations. Specifically, strategic targets such as energy related assets (which could include refineries that produce the motor fuel GPM purchases or ports in which crude oil is delivered) may be at greater risk of future terrorist attacks than other targets in the U.S. or abroad. Such occurrences could have a substantial impact on energy prices, including prices for motor fuels, and a material adverse effect on GPM’s business and results of operations.

Risks Related to the Business Combination and Integration of Business

Prior to the closing of the Business Combination, Arko, a holding company, holds a majority of the outstanding equity of GPM, which is the entity responsible for operating the business described in “Information About Arko.” Following the closing of the Business Combination, both Arko and GPM will be indirect wholly-owned subsidiaries of New Parent. Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to New Parent and its subsidiaries (including Arko and GPM) following the consummation of the Business Combination.

Each of Haymaker and GPM have incurred and will incur substantial costs in connection with the Business Combination and related transactions, such as legal, accounting, consulting and financial advisory fees.

As part of the Business Combination, each of Haymaker and GPM are utilizing professional service firms for legal, accounting and financial advisory services. Although the parties have been provided with estimates of the costs for each advisory firm, the total actual costs may exceed those estimates.

While Haymaker and GPM work to complete the Business Combination, management’s focus and resources may be diverted from operational matters and other strategic opportunities.

Successful completion of the Business Combination may place a significant burden on management and other internal resources. The diversion of management’s attention and any difficulties encountered in the transition process could harm New Parent’s business, financial condition, results of operations and prospects, including with respect to any future growth-oriented acquisitions undertaken by GPM. A significant component of GPM’s organic growth strategy consists of remodeling its convenience stores in order to improve customers’ shopping experience by offering high-quality, convenient and efficient facilities. Diversion of management’s attention and any difficulties encountered in the transition process could lead to substantial delays in the opening of the remodeled convenience stores and have an adverse effect on New Parent.

Following the consummation of the Business Combination, New Parent will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.

Following the consummation of the Business Combination, New Parent will face increased legal, accounting, administrative and other costs and expenses as a public company that GPM does not currently incur.

 

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The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require New Parent to carry out activities GPM has not done previously. For example, New Parent will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition, additional expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if our auditors identify a material weakness or significant deficiency in our internal control over financial reporting), New Parent could incur additional costs rectifying those issues, and the existence of those issues could adversely affect New Parent’s reputation or investor perceptions of it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with New Parent’s status as a public company may make it more difficult to attract and retain qualified persons to serve on the board of directors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require New Parent to divert a significant amount of money that could otherwise be used to expand the business of GPM and achieve certain strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

New Parent may not be able to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the Business Combination is consummated.

GPM is not currently subject to Section 404 of the Sarbanes-Oxley Act. However, following the consummation of the Business Combination and the transactions related thereto, New Parent will be required to comply with Section 404 of the Sarbanes-Oxley Act, which requires, among other things, New Parent to evaluate annually the effectiveness of its internal controls over financial reporting. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act are significantly more stringent than those required of GPM prior to the Business Combination. Section 404(a) of the Sarbanes-Oxley Act (“Section 404(a)”) requires that, beginning with the second annual report following the Business Combination, management assess and report annually on the effectiveness of internal control over financial reporting and identify any material weaknesses in internal control over financial reporting. Additionally, Section 404(b) requires the independent registered public accounting firm to issue an annual report that addresses the effectiveness of internal control over financial reporting. New Parent expects its first Section 404(a) and 404(b) assessment will take place for its annual report for the year ending December 31, 2021. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the Business Combination. If New Parent is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its shares of common stock.

GPM’s and Haymaker’s operations may be restricted during the pendency of the Business Combination pursuant to terms of the Business Combination Agreement.

Prior to the consummation of the Business Combination, GPM is subject to customary interim operating covenants relating to carrying on its business in the ordinary course of business and is also subject to customary restrictions on actions that may be taken during such period without Haymaker’s consent. As a result, GPM may be unable, during the pendency of the Business Combination, to make certain acquisitions and capital expenditures, borrow money and otherwise pursue other actions, even if such actions would prove beneficial.

 

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If the First Merger and the Second Merger, taken together with the GPM Equity Purchase Agreement, do not qualify as a transaction described in Section 351 of the Code, Arko’s U.S. shareholders and the Haymaker stockholders may recognize substantial taxable gain as a result of the mergers, and may be required to pay substantial additional U.S. federal income taxes, in the taxable year in which the transactions occur.

The First Merger and the Second Merger, taken together with the GPM Equity Purchase Agreement, are intended to qualify as a transaction described in Section 351 of the Code. The positions of Arko and Haymaker are not binding on the Internal Revenue Service (the “IRS”) or the courts, and the parties do not intend to request a ruling from the IRS with respect to the transactions described in the merger agreement. Accordingly, there can be no assurance that the IRS will not challenge the qualification of the First Merger and the Second Merger taken together with the GPM Equity Purchase Agreement, as a transaction described in Section 351 of the Code or that a court will not sustain such a challenge. If the IRS were to be successful in any such contention, or if for any other reason the First Merger and the Second Merger, taken together with the GPM Equity Purchase Agreement, were not treated as a transaction described in Section 351 of the Code, then Arko’s U.S. shareholders and Haymaker stockholders, as the case may be, would not be entitled to defer any portion of the gain realized as a result of receiving shares of New Parent Common Stock in the transactions and may be required to pay substantial additional U.S. federal income taxes with respect to the taxable year in which such transactions occur.

New Parent may incur successor liabilities due to conduct arising prior to the completion of the Business Combination.

New Parent may be subject to certain liabilities of Haymaker, Arko and GPM. Haymaker, Arko and GPM at times may each become subject to litigation claims in the operation of its business, including, but not limited to, with respect to employee matters and contract matters. From time to time, GPM and Arko may also face claims from third parties, and some of these claims may lead to litigation. GPM and Arko may also initiate certain claims against third parties. Any litigation may be expensive and time-consuming and could divert management’s attention from our business and negatively affect its operating results or financial condition. The outcome of any litigation cannot be guaranteed, and adverse outcomes can affect Haymaker, Arko, GPM and New Parent negatively.

Arko is required to repay principal and interest outstanding under its corporate bonds in New Israeli Shekels (“NIS”) rather than U.S. dollars, which could expose Arko to unfavorable exchange rate fluctuations.

Arko has NIS 243,234,809 par value (approximately $70 million as of June 30, 2020) Series C corporate bonds outstanding (“Bonds (Series C)”), all of which are denominated in NIS. 36% of the Bonds (Series C) were issued to investors in 2016. Arko’s obligation to repay the outstanding principal and interest under the Bonds (Series C) exposes Arko to unfavorable exchange rate fluctuations between the NIS and the U.S. dollar, such that a substantial value increase in the NIS against the U.S. dollar could impact liquidity. Arko may enter into currency hedging transactions in order to decrease the risks associated with unfavorable exchange rate fluctuations, however, there is no assurance that such hedging transactions will provide adequate protection and cover all of Arko’s potential exposure in connection with exchange rate fluctuations.

Our ability to successfully effect the Business Combination and successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel of GPM, all of whom we expect to stay with New Parent following the Business Combination. The loss of such key personnel could negatively impact the operations and financial results of New Parent.

Our ability to successfully effect the Business Combination and successfully operate the business following the Closing is dependent upon the efforts of certain key personnel of GPM. Although we expect key personnel to remain with New Parent following the Business Combination, there can be no assurance that they will do so. It is possible that GPM will lose some key personnel, and that loss could negatively impact the operations and profitability of New Parent. Furthermore, following the Closing, certain of the key personnel of GPM may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause New Parent to have to expend time and resources helping them become familiar with such requirements.

 

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Some of GPM’s relationships with its customers, vendors and suppliers may experience disruptions in connection with the Business Combination, which may limit New Parent’s business.

Parties with which GPM currently does business or may do business in the future, including customers, vendors and suppliers, may experience uncertainty associated with the Business Combination, including with respect to future business relationships with New Parent. As a result, the business relationships of GPM may be subject to disruptions if customers, vendors, suppliers or others attempt to renegotiate changes in existing business relationships or consider entering into business relationships with parties other than GPM. For example, certain customers and partners of GPM may exercise contractual termination rights as they arise or elect to not renew contracts with GPM. These disruptions could harm relationships with existing customers, vendors, suppliers or others and preclude GPM from attracting new customers, all of which could have a material adverse effect on the business, financial condition and results of operations of GPM and/or New Parent. The effect of such disruptions could be exacerbated by any delay in the consummation of the Business Combination.

Risks Related to Our Organizational Structure

Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to New Parent and its subsidiaries following the consummation of the Business Combination.

New Parent’s principal stockholders and management control New Parent and their interests may conflict with yours in the future.

Assuming that (i) no Public Stockholders exercise their redemption rights in connection with the Business Combination, (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, and (iii) each of Arie Kotler and Morris Willner elects Option A and all Arko Public Shareholders elect Option A, immediately following the anticipated Business Combination and the application of net proceeds, New Parent’s executive officers and directors and significant stockholders will beneficially own approximately 59.51% of the outstanding voting stock of New Parent. Alternatively, assuming that (i) no Public Stockholders exercise their redemption rights in connection with the Business Combination, (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, and (iii) each of Arie Kotler and Morris Willner elects Option B and all Arko Public Shareholders elect Option C, immediately following the anticipated Business Combination and the application of net proceeds, New Parent’s executive officers and directors and significant stockholders will beneficially own approximately 60.36% of the outstanding voting stock of New Parent. Each share of New Parent Common Stock initially entitles its holders to one vote on all matters presented to stockholders generally. Accordingly, those owners, if voting in the same manner, will be able to control the election and removal of the directors of New Parent and thereby determine corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendment of the certificate of incorporation and bylaws and other significant corporate transactions of New Parent for so long as they retain significant ownership. This concentration of ownership may delay or deter possible changes in control of New Parent, which may reduce the value of an investment in the Common Stock of New Parent. So long as they continue to own a significant amount of the combined voting power, even if such amount is less than 50%, they will continue to be able to strongly influence or effectively control decisions of New Parent.

New Parent’s corporate structure will include Israeli subsidiaries that may have adverse tax consequences and expose New Parent to additional tax liabilities.

New Parent’s corporate structure will include Israeli subsidiaries that file tax returns in Israel. Israeli tax authorities may challenge positions taken by such subsidiaries with respect to its tax returns. To the extent such a challenge is sustained, this could increase New Parent’s worldwide effective tax rate and adversely impact its financial position and results of operations. In addition, tax law or regulations in Israel may be amended and Israeli tax authorities may change their interpretations of existing tax law and regulations such that New Parent may be subject to increased tax liabilities, including upon termination or liquidation of its Israeli subsidiaries. If an Israeli subsidiary generates cash that New Parent wishes to transfer to the U.S. or if cash generated by New Parent’s operations is not sufficient to fund its U.S. operations, New Parent may face additional tax liabilities in

 

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transferring cash from its Israeli subsidiaries by means of dividends or otherwise to support New Parent, primarily due to withholding tax requirements imposed pursuant to the provisions of the Israeli tax law (which may be reduced under the provisions of the Convention between the Government of the United States of America and the Government of Israel with respect to Taxes on Income), which could have a material adverse effect on New Parent’s business, financial condition and results of operations.

Arko is required to comply with rules and regulations to satisfy its reporting obligations in connection with its Bonds (Series C) that trade on the Tel Aviv Stock Exchange (“TASE”), and failure to comply with such rules may lead investors to lose confidence in Arko’s financial data, which could negatively impact New Parent.

Arko, GPM’s parent company, will be subject to the reporting requirements of the ISL so long as its Bonds (Series C) trade on the TASE. A significant change in the reporting requirements to which Arko is subject in Israel could result in substantial legal, accounting and other costs, and be burdensome on Arko’s personnel, systems and internal resources. Arko devotes significant resources to address reporting and compliance requirements under Israeli law, however, the measures Arko takes may not be sufficient to satisfy such requirements in the future. Arko’s failure to comply with such requirements may lead investors to lose confidence in Arko’s financial data, which could negatively impact New Parent.

New Parent’s amended and restated certificate of incorporation designate specific courts as the exclusive forum for certain litigation that may be initiated by New Parent’s stockholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claim for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any director, officer or other employee of ours to us or our stockholders; (3) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our bylaws; or (4) any action asserting a claim governed by the internal affairs doctrine (the “Delaware Forum Provision”). The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. Our amended and restated certificate of incorporation further provides that unless we consent in writing to the selection of an alternative forum, the United States District Court in Delaware shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”). In addition, our amended and restated certificate of incorporation provides that any person or entity purchasing or otherwise acquiring any interest in shares of New Parent Common Stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

We recognize that the Delaware Forum Provision and the Federal Forum Provision in our amended and restated certificate of incorporation may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clauses in our amended and restated certificate of incorporation may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court were “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

 

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Risks Related to Ownership of New Parent Common Stock and New Parent Warrants

Prior to the closing of the Business Combination, Arko, a holding company, holds a majority of the outstanding equity of GPM, which is the entity responsible for operating the business described in “Information About Arko.” Following the closing of the Business Combination, both Arko and GPM will be indirect wholly-owned subsidiaries of New Parent. Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to New Parent and its subsidiaries (including Arko and GPM) following the consummation of the Business Combination.

Each of Arie Kotler, Morris Willner, the GPM Minority Investors and the Sponsor will own a significant portion of New Parent Common Stock and Arie Kotler and the Sponsor will have representation on the New Parent Board. Arie Kotler, the GPM Minority Investors, and the Sponsor may have interests that differ from those of other stockholders.

Assuming that (i) no Public Stockholders exercise their redemption rights in connection with the Business Combination, (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, and (iii) each of Arie Kotler and Morris Willner elects Option A and all Arko Public Shareholders elect Option A, upon the completion of the Business Combination the ownership of New Parent is expected to be as follows: approximately 15.8% of New Parent Common Stock will be beneficially owned by Arie Kotler, approximately 14.6% of New Parent Common Stock will be beneficially owned by Morris Willner, approximately 3.3% of New Parent Common Stock will be beneficially owned by the Sponsor and approximately 22.5% of New Parent Common Stock will be beneficially owned by the GPM Minority Investors. Alternatively, assuming that (i) no Public Stockholders exercise their redemption rights in connection with the Business Combination, (ii) Haymaker and New Parent do not issue any additional equity securities prior to Closing, and (iii) each of Arie Kotler and Morris Willner elects Option B and all Arko Public Shareholders elect Option C, upon the completion of the Business Combination the ownership of New Parent is expected to be as follows: approximately 15.1% of New Parent Common Stock will be beneficially owned by Arie Kotler, approximately 14.0% of New Parent Common Stock will be beneficially owned by Morris Willner, approximately 3.6% of New Parent Common Stock will be beneficially owned by the Sponsor and approximately 24.4% of New Parent Common Stock will be beneficially owned by the GPM Minority Investors. These levels of ownership interests also exclude (a) potential future exercises of New Parent Warrants or Ares warrants, (b) 4,000,000 deferred shares of New Parent Common Stock, in the aggregate, that are issuable to the Sponsor upon the occurrence of certain events under the Business Combination Agreement, and (c) any New Parent Common Stock to be received by the GPM Minority Investors in respect of Arko Ordinary Shares or Haymaker Class A Common Stock held by the GPM Minority Investors prior to the consummation of the Business Combination. In addition, director nominees were designated by and affiliated with the Sponsor and Arko. As a result, the Sponsor and Arko may be able to significantly influence the outcome of matters submitted for director action, subject to New Parent’s directors’ obligation to act in the interest of all of New Parent’s stockholders, and for shareholder action, including the designation and appointment of the New Parent board of directors (and committees thereof) and approval of significant corporate transactions, including business combinations, consolidations and mergers. The influence of Arko and the Sponsor over New Parent’s management could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of New Parent, which could cause the market price of New Parent Common Stock to decline or prevent New Parent’s stockholders from realizing a premium over the market price for New Parent Common Stock. Additionally, the Sponsor is in the business of making investments in companies, and the Sponsor (or its affiliates) may from time to time acquire and hold interests in businesses that compete directly or indirectly with New Parent or that supply New Parent with goods and services. the Sponsor (or its affiliates) may also pursue acquisition opportunities that may be complementary to (or competitive with) New Parent’s business, and as a result those acquisition opportunities may not be available to New Parent. Under the “Corporate Opportunity” section of New Parent’s amended and restated certificate of incorporation, among other things, New Parent has renounced any interest or expectancy of New Parent or its subsidiaries being offered an opportunity to participate in any potential transaction opportunities available to Arko and certain of its affiliates and related parties, such parties have no obligation to communicate or offer such potential transaction opportunities to New Parent, and such parties will have no duty to refrain from

 

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engaging in the same or similar businesses as New Parent. Prospective investors in New Parent Common Stock should consider that the interests of Arko and the Sponsor may differ from their interests in material respects.

If New Parent fails to maintain an effective system of internal control over financial reporting, New Parent may not be able to accurately report its financial results or prevent fraud. As a result, shareholders could lose confidence in New Parent’s financial and other public reporting, which is likely to negatively affect New Parent’s business and the market price of New Parent Common Stock.

Effective internal control over financial reporting is necessary for New Parent to provide reliable financial reports and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in New Parent’s implementation could cause New Parent to fail to meet its reporting obligations. In addition, any testing conducted by New Parent, or any testing conducted by New Parent’s independent registered public accounting firm, may reveal deficiencies in New Parent’s internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to New Parent’s financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in New Parent’s reported financial information, which is likely to negatively affect New Parent’s business and the market price of New Parent Common Stock.

Following the consummation of the business combination, New Parent will be required to comply with Section 404 of the Sarbanes-Oxley Act, which requires, management to certify the effectiveness of its internal control over financial reporting. Section 404(a) of the Sarbanes-Oxley Act (“Section 404(a)”) requires that, beginning with New Parent’s second annual report following the business combination, management assess and report annually on the effectiveness of its internal control over financial reporting and identify any material weaknesses in its internal control over financial reporting. Additionally, Section 404(b) requires the independent registered public accounting firm to issue a report annually that addresses the effectiveness of internal control over financial reporting. New Parent’s first Section 404(a) and 404(b) assessment is expected to take place for the annual report for the year ending December 31, 2021.

The market price and trading volume of New Parent Common Stock may be volatile and could decline significantly following the Business Combination.

The stock markets, including Nasdaq and the TASE, on which New Parent intends to list the New Parent Common Stock have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for New Parent Common Stock following the Business Combination, the market price of New Parent Common Stock may be volatile and could decline significantly. In addition, the trading volume in New Parent Common Stock may fluctuate and cause significant price variations to occur. If the market price of New Parent Common Stock declines significantly, you may be unable to resell your shares at or above the market price of New Parent Common Stock as of the date of the consummation of the Business Combination. New Parent cannot assure you that the market price of New Parent Common Stock will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

 

   

the realization of any of the risk factors presented in this proxy statement/prospectus;

 

   

actual or anticipated differences in New Parent’s estimates, or in the estimates of analysts, for New Parent’s revenues, results of operations, level of indebtedness, liquidity or financial condition;

 

   

additions and departures of key personnel;

 

   

failure to comply with the requirements of Nasdaq or the TASE;

 

   

failure to comply with the Sarbanes-Oxley Act or other laws or regulations;

 

   

future issuances, sales or resales, or anticipated issuances, sales or resales, of New Parent Common Stock;

 

   

publication of research reports about New Parent, its sites, or the convenience store industry generally;

 

   

the performance and market valuations of other similar companies;

 

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broad disruptions in the financial markets, including sudden disruptions in the credit markets;

 

   

speculation in the press or investment community;

 

   

actual, potential or perceived control, accounting or reporting problems; and

 

   

changes in accounting principles, policies and guidelines.

In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert New Parent’s management’s attention and resources, which could have a material adverse effect on New Parent.

If securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about New Parent or the convenience store industry, New Parent’s share price and trading volume could decline significantly.

The market for New Parent Common Stock will depend in part on the research and reports that securities or industry analysts publish about New Parent, its business or its industry. Securities and industry analysts do not currently, and may never, publish research on New Parent. If no securities or industry analysts commence coverage of New Parent, the market price and liquidity for New Parent Common Stock could be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover New Parent downgrade their opinions about New Parent Common Stock, publish inaccurate or unfavorable research about New Parent, or cease publishing about New Parent regularly, demand for New Parent Common Stock could decrease, which might cause its share price and trading volume to decline significantly. Additionally, if securities or industry analysts publish negative information regarding the industry generally or certain competitors of New Parent, this may affect the market price of all stocks in New Parent’s sector, even if unrelated to the performance of New Parent.

Even if the Business Combination is consummated the New Parent Warrants may never be in the money, and they may expire worthless.

The exercise price for the New Parent Warrants is $11.50 per shares of New Parent Common Stock. The New Parent Warrants may never be in the money prior to their expiration, and as such, the warrants may expire worthless.

Future issuances of debt securities and/or equity securities may adversely affect New Parent, including the market price of New Parent Common Stock, and may be dilutive to existing New Parent shareholders.

In the future, New Parent may incur debt and/or issue equity ranking senior to the New Parent Common Stock. Those securities will generally have priority upon liquidation. Such securities also may be governed by an indenture or other instrument containing covenants restricting New Parent’s operating flexibility. Additionally, any convertible or exchangeable securities that New Parent issues in the future may have rights, preferences and privileges more favorable than those of the New Parent Common Stock. Because New Parent’s decision to issue debt and/or equity in the future will depend, in part, on market conditions and other factors beyond New Parent’s control, it cannot predict or estimate the amount, timing, nature or success of New Parent’s future capital raising efforts. As a result, future capital raising efforts may reduce the market price of New Parent Common Stock and be dilutive to existing New Parent stockholders.

Certain provisions in New Parent’s amended and restated certificate of incorporation may limit stockholders’ ability to affect a change in management or control.

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consider to be in their best interests. Among other things, New Parent’s amended and restated certificate of incorporation provides for a classified board of directors serving staggered terms of three years. New Parent’s equity plans and its officers’ employment agreements provide certain rights to plan participants and those officers, respectively, in the event of a change in control of New Parent. For more information, see “Description of Arko Corp.’s Securities.”

In the foreseeable future, New Parent plans to reinvest all of its earnings and does not plan to pay dividends.

In the foreseeable future, New Parent plans to reinvest all of its earnings in order to pursue its business plan, cover operating costs and otherwise remain competitive. New Parent does not plan to pay any cash dividends with respect to its securities in the foreseeable future. There can be no assurance that New Parent will, at any time, generate sufficient surplus cash that would be available for distribution to the holders of its common stock as a dividend. Therefore, investors in New Parent should not expect to receive cash dividends in the foreseeable future. Furthermore, any potential future dividends paid by GPM will partially flow through an Israeli company to New Parent. As a result, the potential future dividends flowing through an Israeli company may be subject to Israeli tax liabilities, including withholding tax liabilities, thus reducing the earnings of New Parent available to pay cash dividends.

There can be no assurance that New Parent’s common stock will be approved for listing on Nasdaq or that New Parent will be able to comply with the continued listing standards of Nasdaq.

In connection with the closing of the Business Combination, we intend to list New Parent’s common stock and warrants on Nasdaq under the symbols “ARKO” and “ARKOW,” respectively. New Parent’s continued eligibility for listing may depend on the number of our shares that are redeemed. If, after the Business Combination, Nasdaq delists New Parent’s shares and/or warrants from trading on its exchange for failure to meet the listing standards, the combined company and its stockholders could face significant material adverse consequences including:

 

   

a limited availability of market quotations for the New Parent’s securities;

 

   

a determination that the New Parent’s common stock is a “penny stock” which will require brokers trading in the New Parent’s common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of the New Parent’s common stock;

 

   

a limited amount of analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

While the New Parent Common Stock is expected to be listed on the TASE, there is no guarantee as to how long such listing will be maintained.

While New Parent expects to list the Parent Common Stock on the TASE pursuant to Chapter E’3 of the ISL, New Parent shall have the exclusive right to delist its securities from the TASE, provided it furnishes notice thereof three months in advance of such delisting. If the Parent Common Stock is delisted as aforesaid, some holders of New Parent Common Stock that is traded on the TASE may be required or will choose to sell their stock, which could result in a decline in the market price of the Parent Common Stock and could have a material adverse effect on the combined company. Furthermore, uncertainty as to how long the Parent Common Stock will be listed on the TASE might impact the likelihood of obtaining Arko’s shareholder approval of the Business Combination.

 

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Risks Related to Haymaker

Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to Haymaker.

Subsequent to the consummation of the Business Combination, New Parent may be required to take write-downs or write-offs, or New Parent may be subject to restructuring, impairment or other charges that could have a significant negative effect on New Parent’s financial condition, results of operations and the price of Haymaker common stock, which could cause you to lose some or all of your investment.

Although Haymaker has conducted due diligence on Arko, this diligence may not surface all material issues that may be present with Arko’s business. Factors outside of Arko’s and outside of Haymaker’s control may, at any time, arise. As a result of these factors, New Parent may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in New Parent reporting losses. Even if Haymaker’s due diligence successfully identified certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with our risk analysis. Even though these charges may be non-cash items and therefore not have an immediate impact on New Parent’s liquidity, the fact that New Parent reports charges of this nature could contribute to negative market perceptions about New Parent or its securities. In addition, charges of this nature may cause New Parent to be unable to obtain future financing on favorable terms or at all.

The Sponsor and Haymaker’s officers and directors have interests in the Business Combination that are different from or are in addition to other Haymaker stockholders in recommending that Haymaker stockholders vote in favor of approval of the Business Combination Proposal and approval of the other Proposals described in this proxy statement/prospectus.

When considering the recommendation of Haymaker’s board of directors that Haymaker stockholders vote in favor of the approval of the Business Combination Proposal, Haymaker stockholders should be aware that aside from their interests as stockholders, to the extent that such persons own Haymaker common stock, the Sponsor and Haymaker’s officers and directors have interests in the Business Combination that are different from, or in addition to, those of other Haymaker stockholders generally. These interests include, among other things:

 

   

the beneficial ownership of the Sponsor and certain of Haymaker’s directors and officers (the “Haymaker Initial Stockholders”) of an aggregate of 10,000,000 Founder Shares and 5,550,000 Private Placement Warrants, which shares and warrants would become worthless if Haymaker does not complete a business combination by June 11, 2021, as the Haymaker Initial Stockholders have waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $100.3 million and $4.73 million, respectively, based on the closing price of Haymaker Class A Common Stock and Haymaker Warrants of $10.03 and $0.8521, respectively, on Nasdaq on November 4, 2020, the record date for the special meeting of stockholders;

 

   

the fact that the Sponsor and Haymaker’s officers and directors have agreed not to redeem any Haymaker Common Shares held by them in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at $50,000,000 (excluding any deferred shares of New Parent Common Stock and assuming a value of $10.00 per share) after giving effect to the forfeitures contemplated by the Business Combination Agreement, but, given the restrictions on such shares, Haymaker believes such shares have less value;

 

   

the fact that the Sponsor and Haymaker’s officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Haymaker fails to complete an initial business combination by June 11, 2021;

 

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the fact that the Sponsor will forfeit a portion of its Haymaker Private Placement Warrants and will receive deferred shares of New Parent Common Stock;

 

   

the fact that the Sponsor paid an aggregate of $8,325,000 for its 5,550,000 Private Placement Warrants to purchase shares of Haymaker Class A Common Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by June 11, 2021;

 

   

the right of the Sponsor to hold New Parent Common Stock and the New Parent Common Stock to be issued to the Sponsor upon exercise of its New Parent Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

the anticipated service of Steven J. Heyer (Haymaker’s Chief Executive Officer and Executive Chairman) and Andrew R. Heyer (Haymaker’s President and a member of Haymaker’s board of directors) as directors of New Parent following the Business Combination;

 

   

the continued indemnification of Haymaker’s existing directors and officers and the continuation of Haymaker’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Sponsor and Haymaker’s officers and directors may not participate in the formation of, or become directors or officers of, any other blank check company until Haymaker (i) has entered into a definitive agreement regarding an initial business combination or (ii) fails to complete an initial business combination by June 11, 2021;

 

   

the fact that the Sponsor and Haymaker’s officers and directors will lose their entire investment in Haymaker and will not be reimbursed for any out-of-pocket expenses, to the extent such expenses exceed the amount not required to be retained in the Trust Account, if an initial business combination is not consummated by June 11, 2021; and

 

   

the fact that if the Trust Account is liquidated, including in the event Haymaker is unable to complete an initial business combination by June 11, 2021, the Sponsor has agreed to indemnify Haymaker to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Haymaker has entered into an acquisition agreement or claims of any third-party for services rendered or products sold to Haymaker, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

These interests may influence Haymaker’s directors in making their recommendation that Haymaker stockholders vote in favor of the approval of the Business Combination.

The Sponsor holds a significant number of shares of Haymaker common stock and will lose its entire investment in Haymaker if a Business Combination is not completed.

The Sponsor currently holds 10,000,000 Founder Shares, representing 20% of the total outstanding shares of Haymaker common stock prior to the completion of the Business Combination. The Founder Shares will be worthless if Haymaker does not complete a business combination by June 11, 2021. In addition, the Sponsor holds an aggregate of 5,550,000 Private Placement Warrants that will also be worthless if Haymaker does not complete a business combination by June 11, 2021.

The personal and financial interests of Haymaker’s officers and directors may have influenced their motivation in identifying and selecting Arko and GPM, completing a business combination with such entities and may influence their operation of New Parent following the Business Combination.

 

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Because the Sponsor and Haymaker’s executive officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses, to the extent such expenses exceed the amount not required to be retained in the Trust Account, if a Business Combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for a business combination.

At the closing of Haymaker’s initial business combination, the Sponsor and Haymaker’s executive officers and directors, and any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on Haymaker’s behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on Haymaker’s behalf. These financial interests of the Sponsor and Haymaker’s executive officers and directors may influence their motivation in identifying and selecting a target business combination and completing the Business Combination.

If the Business Combination’s benefits do not meet the expectations of investors or securities analysts, the market price of Haymaker’s securities or, following the Closing, New Parent’s securities, may decline.

If the perceived benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of Haymaker’s securities prior to the Closing may decline. The market values of New Parent’s securities at the time of the Business Combination may vary significantly from the market values of Haymaker securities on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus, or the date on which Haymaker’s stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of New Parent’s securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, Arko Ordinary Shares were publicly traded on the TASE. Therefore, there has not been a public market in the U.S. for the Arko Ordinary Shares. Accordingly, the valuation ascribed to Arko may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for New Parent’s securities develops and continues, the trading price of New Parent’s securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond New Parent’s control. Any of the factors listed below could have a material adverse effect on your investment in New Parent’s securities and New Parent’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of New Parent’s securities may not recover and may experience a further decline.

Factors affecting the trading price of New Parent’s securities may include:

 

   

actual or anticipated fluctuations in New Parent’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

 

   

changes in the market’s expectations about New Parent’s operating results;

 

   

success of competitors;

 

   

New Parent’s operating results failing to meet the expectations of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning New Parent or the industry in which it operates;

 

   

operating and share price performance of other companies that investors deem comparable to New Parent;

 

   

New Parent’s ability to market new and enhanced products and services on a timely basis;

 

   

New Parent’s ability to make acquisitions;

 

   

New Parent’s ability to remodel its convenience stores;

 

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changes in laws and regulations affecting New Parent’s business;

 

   

New Parent’s ability to meet compliance requirements;

 

   

commencement of, or involvement in, litigation involving New Parent;

 

   

changes in New Parent’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of New Parent’s shares of common stock available for public sale;

 

   

any major change in New Parent’s board of directors or management;

 

   

sales of substantial amounts of New Parent’s shares of common stock by New Parent’s directors, executive officers or significant stockholders or the perception that such sales could occur; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of New Parent’s securities irrespective of New Parent’s operating performance. The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of New Parent’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to New Parent could depress the market price of New Parent’s securities regardless of New Parent’s business, prospects, financial conditions or results of operations. A decline in the market price of New Parent’s securities also could adversely affect New Parent’s ability to issue additional securities and New Parent’s ability to obtain additional financing in the future.

Unlike many blank check companies, Haymaker does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it easier for Haymaker to consummate the Business Combination even if a substantial majority of Haymaker’s stockholders do not agree.

Because Haymaker has no specified percentage threshold for redemption contained in its amended and restated certificate of incorporation, its structure is different in this respect from the structure used by many blank check companies. Historically, blank check companies would not be able to consummate an initial business combination if the holders of such company’s public shares voted against a proposed business combination and elected to redeem more than a specified maximum percentage of the shares sold in such company’s initial public offering, which percentage threshold was typically between 19.99% and 39.99%. As a result, many blank check companies were unable to complete a business combination because the amount of shares voted by their public stockholders electing redemption exceeded the maximum redemption threshold pursuant to which such company could proceed with its initial business combination. As a result, Haymaker may be able to consummate the Business Combination even if a substantial majority of the Public Stockholders do not agree with the Business Combination and have redeemed their shares. However, in no event will Haymaker redeem Haymaker Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001 upon the consummation of the Business Combination. If enough Public Stockholders exercise their redemption rights such that Haymaker cannot satisfy the net tangible asset requirement, Haymaker would not proceed with the redemption of Haymaker Class A Common Stock and the Business Combination, and instead may search for an alternate business combination.

Haymaker is not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price Haymaker is paying for the business is fair to Haymaker from a financial point of view.

Haymaker is not required to, and did not, obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that the price Haymaker is paying under the

 

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Business Combination Agreement is fair to Haymaker from a financial point of view. Haymaker’s public stockholders are therefore relying on the judgment of Haymaker’s board of directors, who determined fair market value based on standards generally accepted by the financial community. The Sponsor and Haymaker’s executive officers and directors have interests in the Business Combination that are different from, or in addition to, those of other Haymaker stockholders generally. Haymaker’s board of directors was aware of and considered those interests, among other matters, in evaluating and negotiating the Business Combination and in recommending to Haymaker stockholders that they approve the Business Combination. Please see the section entitled “The Business Combination—Interests of Certain Persons in the Business Combination” for more information.

Haymaker may not hold an annual meeting of stockholders until after the consummation of the Business Combination, which could delay the opportunity for its stockholders to elect directors.

In accordance with Nasdaq corporate governance requirements, Haymaker is not required to hold an annual meeting until one year after its first fiscal year end following its listing on Nasdaq. Under Section 211(b) of the DGCL, Haymaker is, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with Haymaker’s bylaws unless such election is made by written consent in lieu of such a meeting. Haymaker may not hold an annual meeting of stockholders to elect new directors prior to the consummation of the Business Combination, and thus it may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if Haymaker stockholders want it to hold an annual meeting prior to the consummation of the Business Combination, they may attempt to force Haymaker to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

The Sponsor may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

The Sponsor currently owns shares representing 20% of Haymaker’s issued and outstanding shares of common stock. Accordingly, it may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to Haymaker’s amended and restated certificate of incorporation and approval of major corporate transactions. If the Sponsor purchases any additional securities in an open-market transaction or in privately negotiated transactions, this would increase its control. In addition, Haymaker’s board of directors, whose members were elected by the Sponsor, the initial stockholder of Haymaker, is divided into three classes, each of which generally serves for a term of three years with only one class of directors being elected in each year. Haymaker may not hold an annual meeting of stockholders to elect new directors prior to the completion of the Business Combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of Haymaker’s “staggered” board of directors, only a minority of the board of directors will be considered for election and the Sponsor, because of its ownership position, will have considerable influence regarding the outcome. Accordingly, the Sponsor will continue to exert a substantial influence at least until the completion of the Business Combination.

The Sponsor and Haymaker’s directors, executive officers, advisors, and their respective affiliates may elect to purchase shares from Public Stockholders or take other actions, which may influence a vote on the Business Combination and reduce the public “float” of Haymaker Class A Common Stock.

The Sponsor and Haymaker’s directors, executive officers, advisors and their affiliates may purchase shares in privately negotiated transactions or in the open market from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account either prior to or following the Closing, although they are under no obligation to do so. None of the Sponsor, directors, officers or advisors, or their respective affiliates, will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such shares or if such purchases are prohibited by Regulation M of the Exchange Act. It is not currently anticipated

 

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that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Such a purchase may include a contractual acknowledgement or take other actions that such stockholder, although still the record holder of the shares of Haymaker Class A Common Stock, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, directors, officers or advisors, or their affiliates, purchase shares in privately negotiated transactions or in the open market from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of these purchases would be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination, satisfy a closing condition of the Business Combination Agreement that requires Haymaker to have a minimum net worth or a minimum amount of cash at closing of the Business Combination, where it appears such requirement would not otherwise be met, or to increase the amount of cash available to Haymaker for use in the Business Combination. This may result in the completion of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of Haymaker Class A Common Stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances to liquidate your investment, therefore, you may be forced to sell your Haymaker Class A Common Stock potentially at a loss.

Haymaker’s public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of an initial business combination, and then only in connection with those shares of Haymaker Class A Common Stock that such stockholder properly elects to redeem, subject to the limitations described in this proxy statement/prospectus; (ii) the redemption of public shares in connection with a stockholder vote to amend any provisions of Haymaker’s amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of the shares of Haymaker Class A Common Stock if we do not complete an initial business combination by June 11, 2021; and (iii) the redemption of public shares if Haymaker is unable to complete an initial business combination by June 11, 2021, subject to applicable law and as further described herein. In no other circumstances will a public stockholder have any right or interest of any kind in the Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your shares of Haymaker Class A Common Stock, potentially at a loss.

Haymaker may not be able to complete its initial Business Combination by June 11, 2021, in which case Haymaker would cease all operations except for the purpose of winding up and Haymaker would redeem its public shares and liquidate, in which case Public Stockholders may only receive $10.00 per share of Haymaker Class A Common Stock, or less than such amount in certain circumstances, and Haymaker’s existing warrants will expire worthless.

Haymaker must complete its initial business combination by June 11, 2021. Haymaker’s ability to complete its initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt marketer, and other risks described herein. If Haymaker has not completed its initial business combination by such date, it will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Haymaker Class A Common Stock, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to Haymaker to pay taxes (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding shares of Haymaker Class A Common Stock, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as

 

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reasonably possible following such redemption, subject to the approval of our remaining stockholders and Haymaker’s board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, Public Stockholders may only receive $10.00 per shares of Class A Common Stock, and the Haymaker’s existing warrants will expire worthless. In certain circumstances, Haymaker’s public stockholders may receive less than $10.00 per share of Haymaker Class A Common Stock on the redemption of their shares.

If the Business Combination is not completed, potential target businesses may have leverage over Haymaker in negotiating a Business Combination and Haymaker’s ability to conduct due diligence on a Business Combination as it approaches its dissolution deadline may decrease, which could undermine Haymaker’s ability to complete a Business Combination on terms that would produce value for Haymaker’s stockholders.

Any potential target business with which Haymaker enters into negotiations concerning a business combination will be aware that Haymaker must complete an initial business combination by June 11, 2021. Consequently, if Haymaker is unable to complete this Business Combination, a potential target may obtain leverage over Haymaker in negotiating a business combination, knowing that Haymaker may be unable to complete a business combination with another target business by June 11, 2021. This risk will increase as Haymaker gets closer to the timeframe described above. In addition, Haymaker may have limited time to conduct due diligence and may enter into a business combination on terms that Haymaker would have rejected upon a more comprehensive investigation.

Because of Haymaker’s limited resources and the significant competition for Business Combination opportunities, if this Business Combination is not completed, it may be more difficult for Haymaker to complete an Initial Business Combination. In addition, resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If Haymaker is unable to complete an initial Business Combination by June 11, 2021, Public Stockholders may receive only approximately $10.00 per share, on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances), and the Haymaker Warrants will expire worthless.

If Haymaker is unable to complete the Business Combination, Haymaker would expect to encounter intense competition from other entities having a business objective similar to its business objective, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses Haymaker could acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than Haymaker does, and Haymaker’s financial resources will be relatively limited when contrasted with those of many of these competitors. While Haymaker believes there are numerous target businesses Haymaker could potentially acquire with the net proceeds of the IPO and the sale of the Private Placement Warrants, Haymaker’s ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by Haymaker’s available financial resources. This inherent competitive limitation may give others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if Haymaker is obligated to pay cash for shares of Haymaker Class A Common Stock being redeemed and/or makes purchases of its public shares, the resources available to Haymaker for a business combination will be reduced. Any of these obligations may place Haymaker at a competitive disadvantage in successfully negotiating a business combination.

Haymaker anticipates that, if Haymaker is unable to complete this Business Combination, the investigation of other specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If Haymaker decides not to complete a specific business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if Haymaker

 

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reaches an agreement relating to a specific target business, Haymaker may fail to complete such business combination (including the Business Combination described in this proxy statement/prospectus) for any number of reasons including those beyond Haymaker’s control. Any such event will result in a loss to Haymaker of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

If Haymaker does not complete this Business Combination and is unable to complete an initial business combination by June 11, 2021, Haymaker’s public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances) and Haymaker Warrants will expire worthless.

The Exercise of Discretion by Haymaker’s directors and officers in agreeing to changes to the terms of or waivers of closing conditions in, the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the Business Combination Agreement or waivers of conditions are appropriate and in the best interests of the Public Stockholders of Haymaker.

In the period leading up to the closing of the Business Combination, other events may occur that, pursuant to the Business Combination Agreement, would require Haymaker to agree to amend the Business Combination Agreement, to consent to certain actions or to waive rights that Haymaker is entitled to under those agreements. Such events could arise because of changes in the course of Arko and GPM’s business, a request by the Arko shareholders or Arko to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Arko and GPM’s business and would entitle Haymaker to terminate the Business Combination Agreement. In any of such circumstances, it would be in the discretion of Haymaker, acting through Haymaker’s board of directors, to grant its consent or waive its rights. The existence of the financial and personal interests of Haymaker’s directors described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he may believe is best for Haymaker and the public stockholders of Haymaker and what he may believe is best for himself or his affiliates in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Haymaker does not believe there will be any changes or waivers that Haymaker’s directors and officers would be likely to make after stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the stockholders, Haymaker may be required to circulate a new or amended proxy statement/prospectus or supplement thereto and resolicit the vote of the Haymaker public stockholders with respect to the Business Combination Proposal.

If third parties bring claims against Haymaker, the Proceeds Held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

Haymaker’s placing of funds in the Trust Account may not protect those funds from third-party claims against Haymaker. Although Haymaker will seek to have all vendors, service providers (other than Haymaker’s independent auditors), prospective target businesses or other entities with which Haymaker does business execute agreements with Haymaker waiving any right, title, interest or claim of any kind in or to any funds held in the Trust Account for the benefit of Haymaker’s public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against Haymaker’s assets, including the funds held in the Trust Account. If any third-party refuses to execute an agreement waiving such claims to the funds held in the Trust Account, Haymaker’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third-party’s engagement would be significantly more beneficial to Haymaker than any alternative. Marcum LLP, our independent registered public

 

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accounting firm, will not execute agreements with us waiving such claims to the monies held in the Trust Account.

Examples of possible instances where Haymaker may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with Haymaker and will not seek recourse against the Trust Account for any reason. Upon redemption of Haymaker Class A Common Stock, if Haymaker is unable to complete the Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with the Business Combination, Haymaker will be required to provide for payment of claims of creditors that were not waived that may be brought against Haymaker within the ten years following redemption. Accordingly, the per-share redemption amount received by Haymaker’s public stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to Haymaker if and to the extent any claims by a vendor for services rendered or products sold to Haymaker, or a prospective target business with which Haymaker has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third-party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under Haymaker’s indemnity of the underwriters of the Haymaker IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. Haymaker has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of Haymaker. The Sponsor may not have sufficient funds available to satisfy those obligations. Haymaker has not asked the Sponsor to reserve for such eventuality, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for a business combination and redemptions could be reduced to less than $10.00 per public share. In such event, Haymaker may not be able to complete a business combination, and Haymaker stockholders would receive such lesser amount per share in connection with any redemption of public shares. None of Haymaker’s officers or directors will indemnify Haymaker for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Haymaker’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to Public Stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, Haymaker’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While Haymaker currently expects that its independent directors would take legal action on its behalf against the Sponsor to enforce its indemnification obligations to Haymaker, it is possible that Haymaker’s independent directors in exercising their business judgment may choose not to do so in any particular instance. If Haymaker’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to Haymaker’s public stockholders may be reduced below $10.00 per share.

 

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If, before distributing the proceeds in the Trust Account to Public Stockholders, Haymaker files a bankruptcy petition or an involuntary bankruptcy petition is filed against Haymaker that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of Haymaker’s stockholders and the per-share amount that would otherwise be received by Haymaker’s stockholders in connection with haymaker’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to Haymaker public stockholders, Haymaker files a bankruptcy petition or an involuntary bankruptcy petition is filed against Haymaker that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in Haymaker’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Haymaker’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by Haymaker’s stockholders in connection with its liquidation may be reduced.

Haymaker’s stockholders may be held liable for claims by third parties against Haymaker to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to Haymaker’s public stockholders upon the redemption of the shares of Haymaker Class A Common Stock in the event Haymaker does not complete its initial business combination by June 11, 2021, may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is Haymaker’s intention to redeem shares of Haymaker Class A Common Stock as soon as reasonably possible following June 11, 2021, in the event Haymaker does not complete its business combination and, therefore, Haymaker does not intend to comply with the foregoing procedures.

Because Haymaker will not be complying with Section 280, Section 281(b) of the DGCL requires Haymaker to adopt a plan, based on facts known to Haymaker at such time that will provide for its payment of all existing and pending claims or claims that may be potentially brought against it within the 10 years following Haymaker’s dissolution. However, because Haymaker is a blank check company, rather than an operating company, and its operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from Haymaker’s vendors (such as lawyers, investment bankers and auditors) or prospective target businesses. If Haymaker’s plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. Haymaker cannot assure you that it will properly assess all claims that may be potentially brought against Haymaker. As such, Haymaker’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of Haymaker’s stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the Trust Account distributed to Haymaker’s public stockholders upon the redemption of the Haymaker Class A Common Stock in the event Haymaker does not complete its initial business combination by June 11, 2021, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

 

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If, after Haymaker distributes the proceeds in the Trust Account to its Public Stockholders, Haymaker files a bankruptcy petition or an involuntary bankruptcy petition is filed against Haymaker That is Not Dismissed, a Bankruptcy Court May Seek to Recover Such Proceeds, and the Members of Haymaker’s board of directors may be viewed as having breached their fiduciary duties to Haymaker’s creditors, thereby exposing the members of Haymaker’s board of directors and Haymaker to claims of punitive damages.

If, after Haymaker distributes the proceeds in the Trust Account to its public stockholders, Haymaker files a bankruptcy petition or an involuntary bankruptcy petition is filed against Haymaker that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by Haymaker’s stockholders. In addition, Haymaker’s board of directors may be viewed as having breached its fiduciary duty to Haymaker’s creditors and/or having acted in bad faith, thereby exposing itself and Haymaker to claims of punitive damages, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors.

Haymaker stockholders may have limited remedies if their shares suffer a reduction in value following the Business Combination.

Any Haymaker stockholders who choose to remain stockholders following a business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by Haymaker’s officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy statement relating to a business combination contained an actionable material misstatement or material omission.

Risks Related to the Redemption

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of the Haymaker common stock issued in the IPO, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the Haymaker common stock issued in the IPO.

A Public Stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the Haymaker Class A Common Stock included in the units sold in the IPO. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, Haymaker will require each public stockholder seeking to exercise redemption rights to certify to Haymaker whether such stockholder is acting in concert or as a group with any other stockholder. Such certifications, together with other public information relating to share ownership available to Haymaker at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which Haymaker makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over Haymaker’s ability to consummate the Business Combination and you could suffer a material loss on your investment in Haymaker if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if Haymaker consummates the Business Combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in the IPO and, in order to dispose of such excess shares, would be required to sell your shares of Haymaker Class A Common Stock in open market transactions, potentially at a loss. There is no assurance that the value of such excess shares will appreciate over time following the Business Combination or that the market price of Haymaker Class A Common Stock will exceed the per-share redemption price. Notwithstanding the foregoing, stockholders may challenge Haymaker’s determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.

 

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However, Haymaker’s stockholders’ ability to vote all of their shares (including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.

A stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account may not put the stockholder in a better future economic position.

The price at which a Haymaker stockholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination may not be favorable. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in the stock price, and may result in a lower value realized now than a stockholder of Haymaker might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A stockholder should consult the stockholder’s tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

Stockholders of Haymaker who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption, which may make it difficult for them to exercise their redemption rights prior to the deadline. If stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their Haymaker Class A Common Stock for a pro rata portion of the funds held in the Trust Account.

Haymaker public stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things (i) submit a request in writing and (ii) tender their certificates to the Transfer Agent or deliver their shares to the Transfer Agent electronically through the DWAC system at least two business days prior to the special meeting of stockholders. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and the Transfer Agent will need to act to facilitate this request. Stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, because Haymaker does not have any control over this process or over the brokers, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the Business Combination. Please see the section entitled “The Special Meeting of Haymaker Stockholders—Redemption Rights” for additional information on how to exercise your redemption rights.

If a Public Stockholder fails to receive notice of Haymaker’s offer to redeem its public shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

Haymaker will comply with the proxy rules when conducting redemptions in connection with the Business Combination. Despite Haymaker’s compliance with these rules, if a public stockholder fails to receive Haymaker’s proxy materials, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the proxy materials, as applicable, that Haymaker will furnish to holders of its public shares in connection with the Business Combination will describe the various procedures that must be complied with in order to validly redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined financial statements are based on the historical consolidated financial statements of Haymaker and Arko as adjusted to give effect to the Business Combination and related financing transactions. The unaudited pro forma condensed combined balance sheet as of June 30, 2020 assumes that the Business Combination and the related proposed financing transactions were completed on June 30, 2020. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2020 and the year ended December 31, 2019 give pro forma effect to the Business Combination and the related proposed financing transactions as if they had occurred on January 1, 2019.

The assumptions and estimates underlying the unaudited adjustments to the unaudited pro forma condensed combined financial statements are described in the accompanying notes, which should be read in conjunction with, the following included elsewhere in this proxy statement/prospectus:

 

   

Haymaker’s unaudited condensed financial statements and related notes as of and for the three and six months ended June 30, 2020.

 

   

Arko’s unaudited condensed consolidated financial statements and related notes as of and for the three and six months ended June 30, 2020.

 

   

Haymaker’s audited financial statements and related notes for the year ended December 31, 2019.

 

   

Arko’s audited consolidated financial statements and related notes for the year ended December 31, 2019.

 

   

Haymaker’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

   

Arko’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Certain direct and incremental costs related to the Business Combination will be recorded as a reduction against additional-paid-in-capital, consistent with the accounting for reverse recapitalizations. The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the Business Combination.

The unaudited condensed combined pro forma adjustments reflecting the consummation of the Business Combination and related transactions are based on certain estimates and assumptions. These estimates and assumptions are based on information available as of the dates of these unaudited pro forma condensed combined financial statements and may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material.

Haymaker Acquisition Corp. II

Haymaker Acquisition Corp. II (“Haymaker”) is a blank check company that was incorporated on February 13, 2019 and formed for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Haymaker is an “emerging growth company” as defined in section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Based on its business activities, Haymaker is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

Arko Holdings, Ltd.

Arko Holdings, Ltd. (“Arko”) is a public company incorporated in Israel, whose securities are listed for trading on the Tel Aviv Stock Exchange Ltd., that its main activity is holding, through fully owned and

 

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controlled subsidiaries, of controlling rights in GPM Investments, LLC. Arie Kotler, Chairman and Chief Executive Officer of Arko, has an approximately 33% ownership stake in Arko, with the remaining shares owned by Morris Willner (approximately 31%) and other public Arko shareholders (approximately 36%).

GPM Investments, LLC

GPM Investments, LLC (“GPM”) is a Delaware limited liability company formed on June 12, 2002 and is engaged directly and through fully owned and controlled subsidiaries (directly or indirectly) in retail activity which includes the operations of a chain of convenience stores, most of which include adjacent gas stations, and in wholesale activity which includes the supply of fuel to gas stations operated by third parties. As of June 30, 2020, GPM’s activity included the self-operation of approximately 1,266 sites and the supply of fuel to 127 gas stations operated by external operators (dealers), all in 23 states in the Mid-Atlantic, Midwestern, Northeastern, Southeastern and Southwestern United States. GPM is the seventh largest convenience store chain in the United States. Currently, Arko owns approximately 68% of GPM and the remaining approximately 32% is held by Davidson Kempner Capital Management LP, Harvest Partners SCF, L.P and Ares Capital Corporation and certain funds managed or controlled by Ares Capital Management (together “GPM Minority Investors”).

Description of the Business Combination

Haymaker, New Parent, Merger Sub I, Merger Sub II, and Arko entered into the Business Combination Agreement, pursuant to which Arko and Haymaker will become wholly owned subsidiaries of New Parent. The consideration payable under the Business Combination Agreement to the shareholders of Arko consists of up to $717,273,400 in a combination of cash and shares of New Parent (as further explained below) and the stockholders and warrantholders of Haymaker will receive shares and warrants of New Parent. On the Closing Date, (i) Merger Sub I will merge with and into Haymaker, with Haymaker surviving the First Merger as a wholly-owned subsidiary of New Parent (ii) Merger Sub II will merge with and into Arko, with Arko surviving as a wholly-owned subsidiary of New Parent.

In connection with the Business Combination Agreement, New Parent, Haymaker, and the GPM Minority Investors entered into the GPM Equity Purchase Agreement, a copy of which is attached to this proxy statement/prospectus as Annex G. The GPM Equity Purchase Agreement will result in New Parent purchasing from the GPM Minority Investors, directly or indirectly, all of their (a) membership interests in GPM, (b) warrants, options or other rights to purchase or otherwise acquire securities of GPM, equity appreciation rights or profits interests relating to GPM, and (c) obligations, evidences of indebtedness or other securities or interests, but only to the extent convertible or exchange into securities described in clauses (a) or (b) including its membership interests (the “Equity Securities”). In exchange for such Equity Securities, the GPM Minority Investors will receive shares of New Parent Common Stock and the warrants of GPM held by Ares shall be exchanged for the New Ares Warrants.

The Business Combination will be accounted for as a reverse recapitalization under the scope of the Financial Accounting Standards Board’s Accounting Standards Codification 805, Business Combinations (“ASC 805”), in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Under this method of accounting, Haymaker, New Parent and its wholly-owned subsidiaries will collectively be treated as the “acquired” company and Arko will be considered the accounting acquiror for accounting purposes. The Business Combination will be treated as the equivalent of Arko issuing stock for the net assets of Haymaker, accompanied by a recapitalization. The net assets of Arko and Haymaker will be stated at historical cost. No goodwill or intangible assets will be recorded in connection with the Business Combination.

Arko has been determined to be the accounting acquirer based on an evaluation of the following facts and circumstances under both no and maximum redemption scenarios:

 

   

Arko’s and GPM’s senior management will comprise the senior management of New Parent with Arko’s current CEO being the Chairman and CEO of New Parent;

 

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Sellers will collectively have the greatest voting interest in New Parent under the no and maximum redemption scenarios;

 

   

New Parent’s board of directors will initially consist of seven directors, four of which will be designated by Arko, two designated by Haymaker, and one which will be mutually agreed upon by Arko and Haymaker.

 

   

Arko and its consolidated subsidiaries will comprise the ongoing operations of New Parent;

 

   

Arko is larger in relative size than Haymaker;

 

   

New Parent’s headquarters will be that of GPM, a controlled subsidiary of Arko consisting of a majority of Arko’s operations.

As consideration for the Business Combination, the Arko shareholders will receive up to $717.3 million in a combination of New Parent Common Stock and cash (and will be given an option of three separate payout methods as detailed below) and the GPM Minority Investors will receive $337.7 million in New Parent Common Stock for a total purchase consideration of $1.055 billion (“Gross Consideration Value”). The consideration election shall be made no later than the closing date of the Business Combination.

 

  1.

Option A (Stock Consideration): The number of shares validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to the quotient of (i) such holder’s Consideration Value divided by (ii) $10.00 (“Maximum Share Option”).

 

  2.

Option B (Mixed Consideration): (A) a cash amount equal to 10% of such holder’s Consideration Value (the “Cash Option B Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holder’s Cash Option B Amount divided by $8.50.

 

  3.

Option C (Mixed Consideration): (A) a cash amount equal to 20.913% of such holder’s Consideration Value (the “Cash Option C Amount”) plus (B) the number of validly issued, fully paid and nonassessable shares of New Parent Common Stock equal to (i) such holder’s Consideration Value divided by $10.00, minus (ii) such holders Cash Option C Amount divided by $8.50 (collectively with Option B “Maximum Cash Option”).

Below is an illustration of what a hypothetical Arko Public Shareholder would receive per Arko Ordinary Share under each merger consideration option, assuming there are issued and outstanding or issuable Arko Ordinary Shares as of the Second Effective Time equal to 829,698,484 (which represents the number of such shares as of September 10, 2020). In addition to the stock consideration and cash consideration received under each option, the hypothetical Arko Public Shareholder will be entitled to receive a pro rata payment, in the form of a dividend or additional cash consideration, in respect of cash held by Arko in excess of Arko’s debt, each measured at least five business days before Closing. This illustration results in a Company Per Share Value (and a Consideration Value per Arko Ordinary Share) of $0.86, which is calculated as the quotient of $717,273,400 divided by the 829,698,484 shares assumed to be issued and outstanding or issuable Arko Ordinary Shares as of the Second Effective Time.

 

  1.

Option A: The hypothetical Arko Public Shareholder will receive 0.086 shares of New Parent Common Stock per Arko Ordinary Share that he, she, or it holds. The stock consideration is calculated as the quotient of (i) $0.86, the Consideration Value per Arko Ordinary Share for the hypothetical Arko Public Shareholder, divided by (ii) $10.00.

 

  2.

Option B: The hypothetical Arko Public Shareholder will receive 0.076 shares of New Parent Common Stock per Arko Ordinary Share and $0.086 of cash consideration per Arko Ordinary Share that he, she, or it holds. The Cash Option B Amount is $0.086 per Arko Ordinary Share, calculated as 10% of $0.86, the hypothetical Arko Public Shareholder’s Consideration Value per Arko Ordinary Share. The stock

  consideration

under this option is calculated as (i) $0.86, the Consideration Value per Arko Ordinary Share of the hypothetical Arko Public Shareholder, divided by $10.00, minus (ii) such holder’s Cash Option B Amount per Arko Ordinary Share divided by $8.50.

 

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  3.

Option C: The hypothetical Arko Public Shareholder will receive 0.065 shares of New Parent Common Stock per Arko Ordinary Share and $0.18 of cash consideration per Arko Ordinary Share that he, she, or it holds. The Cash Option C Amount per Arko Ordinary Share is $0.18, calculated as 20.913% of $0.86, the hypothetical Arko Public Shareholder’s Consideration Value per Arko Ordinary Share. The stock consideration under this option is calculated as (i) $0.86, the Consideration Value per Arko Ordinary Share of the hypothetical Arko Public Shareholder, divided by $10.00, minus (ii) such holder’s Cash Option C Amount per Arko Ordinary Share divided by $8.50.

Arie Kotler and Morris Willner have executed Voting Support Agreements pursuant to which each has agreed, among other things, to elect only either Option A or Option B as described above; The GPM Minority Investors will receive their entire portion of consideration in shares of New Parent Common Stock.

Option A would result in 71.7 million shares issued to Arko shareholders. Option B and Option C have a Maximum Cash Consideration equal to approximately $100.0 million and would result in 60.0 million shares issued to Arko shareholders after considering the Voting Support Agreements signed by Arie Kotler and Morris Willner.

Arko and the Sponsor have entered into a letter agreement, pursuant to which Sponsor has agreed, among other things, that, at the closing of the Business Combination, Sponsor’s 10.0 million shares of Haymaker’s Class B common stock will be converted into 6.0 million shares of New Parent Common Stock (1.0 million of such shares shall be forfeited) and 4.0 million deferred shares of New Parent Common Stock which shall be issuable contingent upon New Parent’s share price exceeding certain thresholds (collectively “Sponsor Promote Shares”). Sponsor also agreed to forfeit 2.0 million New Parent Warrants.

As part of the GPM Minority Investor acquisition, Ares has a right to require New Parent to purchase the shares of New Parent Common Stock received by Ares pursuant to the GPM Equity Purchase Agreement (the “Ares Shares”) at a price (the “Put Price”) of $12.935 per share (as adjusted pursuant to the GPM Equity Purchase Agreement). New Parent will have the option to either purchase the Ares Shares for cash, or in lieu of such purchase, New Parent may issue additional shares of New Parent Common Stock (the “Additional Shares”) to Ares in an amount sufficient so that the value of the Ares Shares and the Additional Shares, and any dividends, distributions, or other payments received in respect of the Ares Shares or Ares’ membership interest in GPM collectively equal $27,294,053. This price protection is a form of contingent consideration and will be accounted for under the scope of the Financial Accounting Standards Board’s Accounting Standards Codification 815 (“ASC 815”), Derivatives and Hedging, in accordance with US GAAP.

Because the Arko Shareholders may elect their payout option as described above, actual consideration may vary from the amounts described above. The consideration tables below reflect the aggregate consideration assuming the Maximum Cash Option and the Maximum Share Option, excluding the contingent consideration applicable to the Ares GPM Minority Investor (in thousands):

Maximum Share Consideration

 

     Assuming
No
Redemption
Amounts
     Assuming
Maximum
Redemption
Amounts
 

Cash Paid to Arko shareholders

   $ —        $ —    

Equity Issuance to Arko shareholders, $10/share

     717,273        717,273  

Equity issuance to GPM Minority Investors

     337,727        337,727  
  

 

 

    

 

 

 

Total Consideration

   $ 1,055,000      $ 1,055,000  
  

 

 

    

 

 

 

 

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Maximum Cash Consideration

 

     Assuming
No
Redemption
Amounts
     Assuming
Maximum
Redemption
Amounts
 

Cash Paid to Arko shareholders

   $ 100,045      $ 100,045  

Equity Issuance to Arko shareholders, $10/share

     599,574        599,574  

Equity issuance to GPM Minority Investors

     337,727        337,727  
  

 

 

    

 

 

 

Total Consideration

   $ 1,037,345      $ 1,037,345  
  

 

 

    

 

 

 

Haymaker has no specified maximum redemption threshold; however, the consummation of the business combination is conditioned upon, among other things, availability of at least $275.0 million of cash in the Haymaker trust account, after giving effect to redemptions, other Haymaker cash held outside of the trust and any subscription financings. The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemptions:

 

   

Assuming No Redemption – This presentation assumes that no current Haymaker public shareholders exercise redemption rights with respect to their shares for a pro rata portion of funds in Haymaker’s trust account at the close of the Business Combination.

 

   

Assuming Maximum Redemption – This presentation gives effect to Haymaker public shareholders redeeming approximately 12.9 million shares for aggregate redemption payments of $130.5 million. Aggregate redemption payments of $130.5 million calculated as the different between (i) $405.0 million available trust cash and $0.5 million of funds held outside the trust and (ii) $275.0 million required available minimum trust cash. The number of public redemption shares of approximately 12.9 million shares was calculated based on the estimated per share redemption value of $10.13 ($405.0 million in trust account divided by 40.0 million outstanding Haymaker public shares).

The following summarizes the pro forma common shares outstanding for the Maximum Share Option and Maximum Cash Option under the no redemption and maximum redemption scenarios (in thousands):

Maximum Share Consideration

 

     Assuming No
Redemption
    Assuming
Maximum
Redemption
 
     Shares      %     Shares      %  

Haymaker Public Shareholders

     40,000        27     27,115        19

Haymaker Initial Shareholders

     5,000        3     5,000        4
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Haymaker

     45,000        30     32,115        23

Arko shareholders

     71,727        48     71,727        52

GPM Minority Investors

     33,773        22     33,773        25
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Shares at Closing

     150,500        100     137,615        100
  

 

 

    

 

 

   

 

 

    

 

 

 

 

83


Table of Contents

Maximum Cash Consideration

 

     Assuming No
Redemption
    Assuming
Maximum
Redemption
 
     Shares      %     Shares      %  

Haymaker Public Shareholders

     40,000        29     27,115        22

Haymaker Initial Shareholders

     5,000        4     5,000        4
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Haymaker

     45,000        32     32,115        26

Arko shareholders

     59,957        43     59,957        48

GPM Minority Investors

     33,773        24     33,773        27
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Shares at Closing

     138,730        100     125,845        100
  

 

 

    

 

 

   

 

 

    

 

 

 

If the actual facts differ from our assumptions, the numbers of shares and percentage interests set forth above will be different. In addition, the number of shares and percentage interests set forth above do not take into account (i) potential future exercises of New Parent Warrants or Ares warrants or (ii) 4,000,000 deferred shares of New Parent Common Stock, in the aggregate, that are issuable to the Sponsor upon the occurrence of certain events under the Business Combination Agreement.

 

84


Table of Contents

Maximum Share Consideration

ARKO CORP.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2020

(Amounts in thousands of U.S. dollars, except per share data)

 

    Haymaker
Acquisition
Corp. II
(Historical)
    Arko
Holdings,
Ltd.
(Historical)
    Pro Forma
Adjustments
(Assuming
No
Redemption)
        Combined
Pro Forma
(Assuming
No
Redemption)
    Additional
Pro Forma
Adjustments
(Assuming
Max
Redemption)
        Combined
Pro Forma
(Assuming
Max
Redemption)
 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 472     $ 148,621     $ 404,987     2a   $ 450,688     $ (130,458   2m   $ 322,605  
        (14,563   2e        
        (27,315   2e       2,375     2e  
        (61,514   2l        
        —       2f        

Restricted cash with respect to the Company's bonds

    —         331       —           331       —           331  

Restricted cash

    —         17,991       —           17,991       —           17,991  

Trade receivables, net

    —         22,303       —           22,303       —           22,303  

Inventory

    —         145,857       —           145,857       —           145,857  

Prepaid income taxes

    74       —         —           74       —           74  

Prepaid expenses

    130       —         —           130       —           130  

Other current assets

    —         64,599       —           64,599       —           64,599  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current assets

    676       399,702       301,595         701,973       (128,083       573,890  

Non-current assets:

               

Property and equipment, net

    —         363,431       —           363,431       —           363,431  

Right-of-use assets under operating leases

    —         772,232       —           772,232       —           772,232  

Right-of-use assets under financing leases, net

    —         173,873       —           173,873       —           173,873  

Goodwill

    —         133,952       —           133,952       —           133,952  

Intangible assets, net

    —         20,701       —           20,701       —           20,701  

Restricted investments

    —         31,825       —           31,825       —           31,825  

Non-current restricted cash with respect to the Company's bonds

    —         1,563       —           1,563       —           1,563  

Equity investment

    —         3,344       —           3,344       —           3,344  

Deferred tax assets

    19       —         —           19       —           19  

Investments and cash held in Trust Account

    404,987       —         (404,987   2a     —         —           —    

Other non-current assets

    —         11,136       —           11,136       —           11,136  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total assets

  $ 405,682     $ 1,911,759     $ (103,392     $ 2,214,049     $ (128,083     $ 2,085,966  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Liabilities

               

Current liabilities:

               

Long-term debt, current portion

  $ —       $ 17,820     $ —       2k   $ 17,820     $ —         $ 17,820  

Accounts payable

    —         148,217       —           148,217       —           148,217  

Other current liabilities

    157       69,966       —           70,123       —           70,123  

Operating leases, current portion

    —         35,675       —           35,675       —           35,675  

Financing leases, current portion

    —         7,479       —           7,479       —           7,479  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current liabilities

    157       279,157       —           279,314       —           279,314  

Non-current liabilities:

               

Long-term debt, net

    —         316,699       (108   2k     316,591       —           316,591  

Asset retirement obligation

    —         37,382       —           37,382       —           37,382  

Operating leases

    —         799,227       —           799,227       —           799,227  

Financing leases

    —         200,045       —           200,045       —           200,045  

Other non-current liabilities

    —         38,423       8,306     2j     46,729       —           46,729  

 

85


Table of Contents
    Haymaker
Acquisition
Corp. II
(Historical)
    Arko
Holdings,
Ltd.
(Historical)
    Pro Forma
Adjustments
(Assuming
No
Redemption)
        Combined
Pro Forma
(Assuming
No
Redemption)
    Additional
Pro Forma
Adjustments
(Assuming
Max
Redemption)
        Combined
Pro Forma
(Assuming
Max
Redemption)
 

Deferred underwriter compensation

    15,000       —         (15,000   2e     —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities

    15,157       1,670,933       (6,802       1,679,288       —           1,679,288  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Commitments

               
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

 

 

 

Common stock subject to possible redemption 38,080,223 shares at redemption value as of June 30, 2020

    385,525       —         (385,525   2b     —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Stockholder's equity:

               

Stockholder's equity

    —         2,929       (2,929   2h     —         —           —    

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

    —         —         —           —         —           —    

Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 1,919,777 shares issued and outstanding (excluding 38,080,223 shares subject to redemption) as of June 30, 2020

    —         —         15     2b, 2d, 2g     15       (1   2m     14  

Class B convertible common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares issued and outstanding

    1       —         (1   2d     —         —           —    

Additional paid-in capital

    937       112,592       385,521     2b     488,040       (130,457   2m     359,958  
        4,062     2c        
        437     2e        
        (27,315   2e       2,375     2e  
        (11   2g        
        2,929     2h        
        78,599     2i        
        108     2k        
        (61,514   2l        
        (8,306   2j        
        1     2d        

Accumulated other comprehensive income

      4,439       —           4,439       —           4,439  

Non-controlling interest

    —         152,790       (78,599   2i     74,191       —           74,191  

Retained earnings (accumulated deficit)

    4,062       (31,924     (4,062   2c     (31,924     —           (31,924
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total equity

    5,000       240,826       288,935         534,761       (128,083       406,678  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities and equity

  $ 405,682     $ 1,911,759     $ (103,392     $ 2,214,049     $ (128,083     $ 2,085,966  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

 

86


Table of Contents

Maximum Cash Consideration

ARKO CORP.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2020

(Amounts in thousands of U.S. dollars, except per share data)

 

    Haymaker
Acquisition
Corp. II
(Historical)
    Arko Holdings,
Ltd.
(Historical)
    Pro Forma
Adjustments
(Assuming No
Redemption)
          Combined
Pro Forma
(Assuming
No
Redemption)
    Additional
Pro Forma
Adjustments
(Assuming
Max
Redemption)
          Combined
Pro Forma
(Assuming
Max
Redemption)
 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 472     $ 148,621     $ 404,987       2a     $ 350,643     $ (130,458     2m     $ 222,560  
        (14,563     2e          
        (27,315     2e         2,375       2e    
        (61,514     2l          
        (100,045     2f          

Restricted cash with respect to the Company's bonds

    —         331       —           331       —           331  

Restricted cash

    —         17,991       —           17,991       —           17,991  

Trade receivables, net

    —         22,303       —           22,303       —           22,303  

Inventory

    —         145,857       —           145,857       —           145,857  

Prepaid income taxes

    74       —         —           74       —           74  

Prepaid expenses

    130       —         —           130       —           130  

Other current assets

    —         64,599       —           64,599       —           64,599  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current assets

    676       399,702       201,550         601,928       (128,083       473,845  

Non-current assets:

               

Property and equipment, net

    —         363,431       —           363,431       —           363,431  

Right-of-use assets under operating leases

    —         772,232       —           772,232       —           772,232  

Right-of-use assets under financing leases, net

    —         173,873       —           173,873       —           173,873  

Goodwill

    —         133,952       —           133,952       —           133,952  

Intangible assets, net

    —         20,701       —           20,701       —           20,701  

Restricted investments

    —         31,825       —           31,825       —           31,825  

Non-current restricted cash with respect to the Company's bonds

    —         1,563       —           1,563       —           1,563  

Equity investment

    —         3,344       —           3,344       —           3,344  

Deferred tax assets

    19       —         —           19       —           19  

Investments and cash held in Trust Account

    404,987       —         (404,987     2a       —         —           —    

Other non-current assets

    —         11,136       —           11,136       —           11,136  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total assets

  $ 405,682     $ 1,911,759     $ (203,437     $ 2,114,004     $ (128,083     $ 1,985,921  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Liabilities

               

Current liabilities:

               

Long-term debt, current portion

  $ —       $ 17,820     $ —         2k     $ 17,820     $ —         $ 17,820  

Accounts payable

    —         148,217       —           148,217       —           148,217  

Other current liabilities

    157       69,966       —           70,123       —           70,123  

Operating leases, current portion

    —         35,675       —           35,675       —           35,675  

Financing leases, current portion

    —         7,479       —           7,479       —           7,479  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current liabilities

    157       279,157       —           279,314       —           279,314  

 

87


Table of Contents
    Haymaker
Acquisition
Corp. II
(Historical)
    Arko Holdings,
Ltd.
(Historical)
    Pro Forma
Adjustments
(Assuming No
Redemption)
          Combined
Pro Forma
(Assuming
No
Redemption)
    Additional
Pro Forma
Adjustments
(Assuming
Max
Redemption)
          Combined
Pro Forma
(Assuming
Max
Redemption)
 

Non-current liabilities:

               

Long-term debt, net

    —         316,699       (108     2k       316,591       —           316,591  

Asset retirement obligation

    —         37,382       —           37,382       —           37,382  

Operating leases

    —         799,227       —           799,227       —           799,227  

Financing leases

    —         200,045       —           200,045       —           200,045  

Other non-current liabilities

    —         38,423       8,306       2j       46,729       —          
46,729
 

Deferred underwriter compensation

    15,000       —         (15,000     2e       —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities

    15,157       1,670,933       (6,802       1,679,288       —           1,679,288  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Commitments

               
 

 

 

   

 

 

       

 

 

   

 

 

     

 

 

 

Common stock subject to possible redemption 38,080,223 shares at redemption value as of June 30, 2020

    385,525       —         (385,525     2b       —         —           —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Stockholder's equity:

               

Stockholder's equity

    —         2,929       (2,929     2h       —         —           —    

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

    —         —         —           —         —           —    

Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 1,919,777 shares issued and outstanding (excluding 38,080,223 shares subject to redemption) as of June 30, 2020

    —         —         14       2b, 2d, 2g       14       (1     2m       13  

Class B convertible common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares issued and outstanding

    1       —         (1     2d       —         —           —    

Additional paid-in capital

    937       112,592       385,521       2b       387,996       (130,457     2m       259,914  
        4,062       2c          
        437       2e          
        (27,315     2e         2,375       2e    
        (10     2g          
        2,929       2h          
        78,599       2i          
        108       2k          
        (61,514     2l          
        (100,045     2f          
        (8,306     2j          
        1       2d          

Accumulated other comprehensive income

    —         4,439       —           4,439       —           4,439  

Non-controlling interest

    —         152,790       (78,599     2i       74,191       —           74,191  

Retained earnings (accumulated deficit)

    4,062       (31,924     (4,062     2c       (31,924     —           (31,924
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total equity

    5,000       240,826       188,890         434,716       (128,083       306,633  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities and equity

  $ 405,682     $ 1,911,759     $ (203,437     $ 2,114,0