Casey's to Acquire CEFCO Convenience Stores
ANKENY, Iowa, & TEMPLE, Texas — Casey's General Stores Inc. continues to grow its network through acquisitions.
The Ankeny-based retailer has entered into an agreement to acquire Fikes Wholesale Inc., owner of CEFCO Convenience Stores, in an all-cash transaction for $1.145 billion. The purchase price includes tax benefits valued at approximately $165 million for a net after-tax purchase price of $980 million.
"During our Investor Day presentation in June of 2023, we outlined our business strategy to achieve top-quintile EBITDA growth. One of the core pillars of the plan is to grow the number of units," said Darren Rebelez, board chair, president and CEO of Casey's. "This acquisition will allow Casey's to accelerate our unit growth plan with high-quality assets that, along with our recent 22-store acquisition in northern Texas, will provide an expanded presence in Texas and allow us to continue to expand in the state and region.
"We expect the acquisition will create value for Casey's shareholders in the near- and long-term and will be accretive to Casey's EBITDA in the current fiscal year. Fikes is a well-run and well-respected company in our industry, and we look forward to welcoming the Fikes team to the Casey's family. We could not be more excited about the future of our two organizations," Rebelez added.
[Read more: Casey's Makes Progress in Year One of New Three-Year Plan]
Casey's acquisition of Fikes will include 198 retail stores and a dealer network. The proposed transaction will increase Casey's footprint to nearly 2,900 stores. The acquisition will bring 148 additional stores to Texas, which is a highly strategic market for Casey's, as well as 50 stores in the southern states of Alabama, Florida and Mississippi.
In addition to the retail stores and dealer locations, the transaction includes a fuel terminal and a commissary to support the Texas stores.
"The acquisition by Casey's, especially given its reputation and shared values, is an exciting development for Fikes and our employees. I am happy that the CEFCO stores will join a top convenience retailer that will reinvest in the stores and eventually bring Casey's pizza to many of our customers as well as provide professional opportunities for our employees. We believe Casey's will be an excellent steward of the CEFCO experience that our loyal customers have come to expect," commented Raymond Smith, president of Fikes and CEFCO.
The move marks the latest divestment from Fikes/CEFCO. In June 2022, the company sold 50 of its petroleum marketing and c-stores located in Texas, Louisiana, Mississippi, Arkansas and Alabama, as Convenience Store News previously reported. As part of the deal, BreakTime Corner Market LLC acquired 48 of the stores, while Refuel Operating Co. LLC dba Refuel acquired two stores in Mississippi.
Casey's plans to finance the transaction through balance sheet cash and bank financing. The net investment of $980 million represents an approximate multiple of 11 times CEFCO's pro forma adjusted 2023 EBITDA. The company expects to achieve approximately $45 million in annual run-rate synergies upon the completion of kitchen installations in the acquired stores.
The transaction is anticipated to close during the fourth quarter of calendar year 2024, subject to customary closing conditions and regulatory approval.
Casey's was advised by BMO Capital Markets Corp. as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel, and Cleary Gottlieb Steen & Hamilton as antitrust legal counsel. Fikes was advised by BofA Securities as financial advisor and Bourland, Wall & Wenzel, P.C. as legal counsel.
Fikes Wholesale and CEFCO began as a single filling station in Cameron, Texas, in 1952.
Founded more than 50 years ago, Casey's has grown to become the third-largest convenience store retailer and the fifth-largest pizza chain in the United States.
After the acquisition closes, the company will operate nearly 2,900 stores across 17 states. Casey's is No. 3 on the 2024 Convenience Store News Top 100 ranking.