Iowa-based Casey’s has reached an agreement to acquire Fikes Wholesale, owner of CEFCO Convenience Stores, in an all-cash transaction worth $1.15 billion. The purchase price includes tax benefits valued at about $165 million for a net after-tax purchase price of $980 million.
Casey’s acquisition of Fikes will include 198 retail stores and a dealer network, bringing Casey’s footprint to nearly 2,900 stores. The transaction 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.
“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.”
Raymond Smith, president of Fikes and CEFCO, highlighted the strategic alignment between the two convenience organizations.
“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.”
Casey’s plans to finance the transaction through balance sheet cash and bank financing. The company expects to achieve approximately $45 million in annual run-rate synergies upon the completion of kitchen installations in the acquired stores.
“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,” added Rebelez. “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.”
The transaction is anticipated to close during the fourth quarter of calendar year 2024, subject to customary closing conditions and regulatory approval.
Fikes Wholesale and CEFCO Convenience Stores were founded as a family-owned and operated business in 1952. The chain operates convenience stores in Alabama, Florida, Mississippi and Texas.
