Yesway announced that it has entered into a definitive agreement to purchase Allsup’s Convenience Stores.
Allsup’s Convenience Stores Inc., Allsup’s Petroleum Inc., and High Five Capital LP are headquartered in Clovis, N.M. The company was founded in 1956 and now comprises 304 stores in New Mexico, West Texas and Oklahoma. Allsup’s is particularly known for its deep-fried Allsup’s Burrito.
Allsup’s has served as a cornerstone in each of its local communities for over 60 years.
“Allsup’s founders, Lonnie and Barbara Allsup, were true pioneers, innovators, and visionaries of convenience store retailing,” said Thomas Nicholas Trkla, Chairman and CEO of Yesway. “They were the first to offer customers hot, cooked foods, self-serve gasoline sales, and 24-hour service. We could not be more pleased to be joining forces with such a strong, beloved company and talented team of employees.”
Trkla explained that what most attracted Yesway to Allsup’s was that he could see great synergies existing between the two chains. He said that Yesway was building out its food service program and Allsup’s had already built an outstanding reputation as a destination food service chain. That standing complements nicely with what Yesway brings to the match. Yesway is a leader in technology platforms, as well as loyalty and fleet programs – things that Allsup’s has yet to implement.
“And obviously, we benefit tremendously from such an existing iconic food service platform,” Trkla said. “Not only do we inherit it in the stores we buy from Allsup’s, but also one of the things we’re going to be looking at is putting that food service platform back into our Yesway stores.”
It makes sense geographically, as well, said Trkla. Des Moines, Iowa-based Yesway operates over 150 conveniences stores located in Iowa, Texas, New Mexico, Oklahoma, Kansas, Missouri, Nebraska, South Dakota and Wyoming.
“And so just from a geographic footprint standpoint, it makes a lot of sense as well in terms of the economics of running a chain, obviously,” Trkla said. “It’s much, obviously, easier to run them, how you staff yourself and your district managers and things like that, when you’re more proximate geographically. That’s attractive, as well.”
Mark Allsup, president of Allsup’s Convenience Stores, said that his people are very excited to have selected Yesway to take the reins as custodian of the Allsup brand and legacy.
“We chose Yesway as a partner because their values are truly aligned with ours,” said Mark Allsup. “They share our commitment to support the local communities we serve, our unwavering pledge to our customers to provide them with a terrific shopping experience, and our dedication to the success and well-being of our employees.”
Yesway plans to assemble a portfolio comprising more than 500 convenience stores in selected regions of the U.S. over the next several years. The Allsup’s acquisition lifts them to approximately 422 stores.
Personnel-wise, Trkla said that he doesn’t see a lot of changes at the corporate level. He said that the Allsups ran the organization very much in a classic “mom and pop” fashion – albeit a very large one. Mark Allsup will become president of the new company, according to Trkla, bringing many of his senior operations and fuel people along with him.
“Day one, yes. We’re going to keep everyone together,” said Trkla. “We’ve hired an integration firm to assist us in looking at buying two very large companies. There are close to 4,500 combined employees. So there’s, obviously, a lot of integration work to do.”
Trkla hopes to minimize any issues of overlapping of personnel. “And we’ll, obviously, do those things respectfully, carefully and diligently over time,” he said.
Barbara Allsup, who has served as Allsup’s vice president of finance since its founding and whom Trkla called an icon in the convenience store industry, will assist with the integration process before retiring. She said that the Allsup legacy is in good hands with Yesway.
“Mark was very deliberate and selective in choosing a buyer for our company and we believe he has made an excellent choice in Yesway,” said Barbara Allsup. “Lonnie and I opened our first store in Roswell, New Mexico, in 1956 and have operated as a private, family-owned business ever since. We have always cared deeply about maintaining strong family commitments, having honest, hard-working employees, and partnering with helpful service providers, vendors and other professionals in the communities we serve.”
Trkla said that store rebranding, if any, will be limited. The new company, he said, will move carefully and deliberately in making those decisions.
“Allsup’s stores will say stay Allsup’s stores, period,” he said. “Where there are conflicts in some states, we’ve hired some experts to look at these branding questions. We’re going to make no decisions very quickly; and we’re going to obviously test out their food service platform in our existing Yesway stores.”
Allsup’s is renowned for its food service, particularly its burrito platform, which Trkla estimated sells in the neighborhood of 22 million burritos every year. Burrito’s aside, it’s obvious in talking to Trkla that he admires the Allsups and their work to build such a large operation and yet preserve its simplicity.
“But they ran such a strong organization in that regard,” he said. “My hat’s off to Lonnie and to Barbara and the organization that they created – and what Mark has done, as well, the last couple years. It’s almost a privilege to own it and a privilege to basically take that responsibility of being kind of their shepherd or kind of their custodian of this great franchise going forward.”
Goldman Sachs is acting as financial advisor to Yesway for the transaction, and Goldman Sachs and RBC are joint lead arrangers on the associated debt facility.
The deal is subject to regulatory approval and customary closing conditions.
