The purchase price includes tax benefits valued at $80 million for a net after-tax purchase price of $500 million.
Buchanan Energy and Bucky’s Convenience Stores were founded as a family-owned and operated business in 1980. Today, they operate convenience stores primarily in Illinois and Nebraska.
Casey’s acquisition of Buchanan Energy will include 94 retail stores and 79 dealer locations, as well as multiple parcels of real estate for future new store construction, which will increase Casey’s footprint to over 2,300 stores. The acquisition will enhance Casey’s presence in these attractive markets and enables the company to bring Casey’s offerings to a broader group of consumers.
The transaction will also include a dealer network of stores where Casey’s will manage fuel supply agreements to these stores. This new capability will provide the Company future flexibility with respect to mergers and acquisitions as well as a new income stream while leveraging its scale for fuel procurement.
“In January of this year, we outlined our business strategy to achieve top-quintile EBITDA growth and deliver on our purpose ‘to make life better for communities and guests every day’,” said Darren Rebelez, president and chief executive officer of Casey’s. “We’ve been hard at work executing on our strategic vision to reinvent the guest experience; creating efficiencies to improve the shape of our business and to fund future growth; and accelerating our new store builds and acquisitions. Adding Bucky’s to the Casey’s family is aligned with our strategy.”
Steve Buchanan, founder and president of Buchanan Energy and Bucky’s, highlighted the strategic alignment between the two convenience organizations.
“The acquisition by Casey’s is an exciting milestone in our 40-year history, and I am pleased that Bucky’s will join a top convenience retailer for its next chapter,” he said. “The addition of Casey’s pizza to our existing high-volume stores will be celebrated by our customers, and our shared Midwestern roots and community values are aligned as we continue to serve our loyal customers.”
“We anticipate that the acquisition will create compelling value for Casey’s shareholders in the near- and long-term,” Rebelez added, “and it will quickly be accretive to Casey’s EBITDA and earnings per share. This is an exciting time for Casey’s, and we look forward to welcoming the Bucky’s team.”
The company will finance the transaction with a combination of cash on hand, revolver capacity and bank financing. The net investment of $500 million represents a multiple of 10.6 times Bucky’s last 12 months of EBITDA. The company expects to achieve $23 million in annual synergies by the third year.
The transaction is anticipated to close by the end of calendar year 2020, subject to customary closing conditions and regulatory approval. Casey’s was advised by Goldman Sachs & Co. LLC and Husch Blackwell. Buchanan Energy used BofA Securities Inc., as their financial advisor, and McGrath North Mullin & Kratz PC LLO, as its legal advisor.
Casey’s General Stores is a Fortune 500 company operating over 2,200 convenience stores in 16 states. Founded more than 50 years ago, the company has grown to become the fourth-largest convenience store retailer and the fifth-largest pizza chain in the United States. Casey’s provides freshly prepared foods, quality fuel, and friendly service at every location. Guests can enjoy famous, made-from-scratch pizza, donuts, other assorted bakery items and a wide selection of beverages and snacks.