US convenience store chain Casey’s General Stores has agreed to acquire CEFCO Convenience Stores, owned by Fikes Wholesale, in a $1.145bn cash transaction.
The deal includes tax benefits estimated at $165m, bringing the net after-tax purchase price to $980m.
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The acquisition will add 198 retail stores and a dealer network to Casey’s portfolio.
The deal adds 148 stores in Texas and 50 stores across Alabama, Florida and Mississippi for Casey’s.
It will also include a fuel terminal and a commissary to support the Texas stores.
Overall, the acquisition will increase Casey’s total footprint to 2,900 stores.
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By GlobalDataCasey’s president and CEO Darren Rebelez said: “During our Investor Day presentation in June of 2023, we outlined our business strategy to achieve top-quintile EBITDA [earnings before interest, taxation, depreciation and amortisation] growth. One of the core pillars of the plan is to grow the number of units.
“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.”
The company intends to finance the acquisition through existing cash and bank financing.
The investment represents a multiple of 11 times CEFCO’s pro forma adjusted 2023 EBITDA.
Casey’s anticipates achieving $45m in annual run-rate synergies following the completion of kitchen installations in the acquired stores.
Rebelez added: “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 organisations.”
The transaction is expected to close in the fourth quarter of 2024.
In August 2023, Casey’s agreed to acquire 63 locations from EG America, a subsidiary of EG Group.
