Casey’s General Stores Inc. on Friday agreed to acquire Fikes Wholesale Inc., owner of CEFCO Convenience Stores, in an all-cash transaction for $1.145 billion. The purchase price includes tax benefits valued at approximately $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.
The companies expect the transaction to close during the fourth quarter, subject to customary closing conditions and regulatory approval.
The proposed transaction will increase Casey’s footprint to nearly 2,900 stores. The acquisition will expand Casey’s presence into the attractive Texas and southern markets, the company said. It 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.
Ankeny, Iowa-based Casey’s General Stores operates more than 2,650 convenience stores in the greater Midwestern states under the Casey’s and GoodStop brands and in Texas under the Lone Star Food Stores brand. The company is the third-largest convenience-store retailer, the fourth-largest holder of liquor licenses and the fifth-largest pizza chain in the United States.
“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, who formerly served as IHOP's president. “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.”
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.”
The company plans to 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. The company expects to achieve approximately $45 million in annual run-rate synergies upon the completion of kitchen installations in the acquired stores.
Fikes Wholesale. and CEFCO Convenience Stores began as a single “filling station” in Cameron, Texas, in 1952, founded as a family-owned and operated business. The Temple, Texas-based company operates convenience stores in Alabama, Florida, Mississippi and Texas.
This story originally appeared in sister publication CSP Daily News.
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