Casey’s General Stores, headquartered in Ankeny, has announced an agreement to acquire Fikes Wholesale, Inc., owner of CEFCO Convenience Stores, in an all-cash transaction for $1.145 billion.
According to a release, the purchase price includes tax benefits valued at approximately $165 million, for a net after-tax purchase price of $980 million.
Fikes Wholesale, Inc. and CEFCO Convenience Stores began as a single “filling station” in Cameron, Texas in 1952 and now has stores in multiple states. Casey’s acquisition of Fikes will include 198 retail stores and a dealer network.
The transaction will increase Casey’s footprint to nearly 2,900 stores.
The acquisition will bring 148 additional Casey’s stores to Texas, 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.
“During our Investor Day presentation in June 2023, we outlined our business strategy to achieve top-quintile EBITDA growth,” said Darren Rebelez, board chair, president and CEO of Casey’s. “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 acquisition by Casey’s, especially given its reputation and shared values, is an exciting development for Fikes and our employees,” said Raymond Smith, president of Fikes and CEFCO. “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 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,” Mr. Rebelez added. “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.
According to the release, Casey’s will 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. Casey’s 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 is a Fortune 500 company operating over 2,600 convenience stores. Founded more than 50 years ago, the company has grown to become the third-largest convenience store retailer and the fifth-largest pizza chain in the United States.
