Casey’s General Stores, Inc. (“Casey’s” or the “Company”) (Nasdaq: CASY), a leading convenience store chain in the United States, has announced its agreement to acquire Fikes Wholesale, Inc. (“Fikes”), the owner of CEFCO Convenience Stores (“CEFCO”), in an all-cash transaction valued at $1.145 billion. The deal includes tax benefits estimated at approximately $165 million, resulting in a net after-tax purchase price of $980 million.
Founded in 1952 with a single “filling station” in Cameron, Texas, Fikes Wholesale and CEFCO have grown into a respected operator with stores across multiple states. The acquisition will add 198 retail stores and a dealer network to Casey’s portfolio, increasing its footprint to nearly 2,900 locations. This deal will significantly boost Casey’s presence in Texas with 148 additional stores, as well as 50 stores across Alabama, Florida, and Mississippi. The transaction also includes a fuel terminal and a commissary to support the Texas stores.
Darren Rebelez, Board Chair, President, and CEO of Casey’s, commented on the acquisition, stating, “Our Investor Day presentation in June 2023 outlined our strategy for top-quintile EBITDA growth, with unit expansion as a core component. This acquisition aligns perfectly with our growth plans and, along with our recent acquisition of 22 stores in northern Texas, will enhance our presence in Texas and the surrounding region.”
Raymond Smith, President of Fikes and CEFCO, expressed enthusiasm about the acquisition, noting, “Casey’s reputation and shared values make this an exciting development for Fikes and our employees. We are pleased that CEFCO stores will join a leading convenience retailer that will invest in the stores, introduce Casey’s pizza to many of our customers, and create new professional opportunities for our staff. We are confident that Casey’s will uphold the exceptional experience our loyal customers expect.”
Rebelez further added, “We anticipate this acquisition will deliver value for Casey’s shareholders both in the short- and long-term and will be accretive to our EBITDA in the current fiscal year. Fikes is a highly-regarded company in our industry, and we eagerly await welcoming their team to the Casey’s family. We are excited about the future of our combined organizations.”
The acquisition will be financed 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 around $45 million in annual run-rate synergies following the completion of kitchen installations in the acquired stores.
The transaction is expected to close in the fourth quarter of 2024, pending customary closing conditions and regulatory approval. Casey’s has been advised by BMO Capital Markets Corp. as financial advisor, Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel, and Cleary Gottlieb Steen & Hamilton as antitrust legal counsel. Fikes was advised by BofA Securities as financial advisor and Bourland, Wall & Wenzel, P.C. as legal counsel.
