Casey’s General Stores, a leading convenience store chain in the U.S., has announced an agreement to acquire Fikes Wholesale, Inc. (“Fikes”), the owner of CEFCO Convenience Stores (“CEFCO”), in an all-cash transaction valued at $1.145 billion. This price includes tax benefits estimated at around $165 million, bringing the net after-tax cost to $980 million.
Fikes Wholesale, Inc. and CEFCO Convenience Stores began as a single filling station in Cameron, Texas in 1952 and have since expanded to become a notable operator with stores across multiple states. Casey’s acquisition will encompass 198 retail stores and a dealer network. Once completed, this deal will expand Casey’s footprint to nearly 2,900 stores, adding 148 locations in Texas—a strategically important market for Casey’s—as well as 50 stores across Alabama, Florida, and Mississippi. The transaction also includes a fuel terminal and a commissary to support the Texas locations.
Darren Rebelez, Board Chair, President, and CEO of Casey’s, commented, “In our Investor Day presentation in June 2023, we outlined our strategy to achieve top-quintile EBITDA growth, with unit expansion being a core component. This acquisition will accelerate our growth plan with high-quality assets and, along with our recent acquisition of 22 stores in northern Texas, will significantly enhance our presence in Texas and the surrounding region.”
Raymond Smith, President of Fikes and CEFCO, expressed enthusiasm about the deal. “The acquisition by Casey’s is a thrilling development for Fikes and our employees. With Casey’s reputation and shared values, we are excited that the CEFCO stores will join a leading convenience retailer that will reinvest in the stores and bring Casey’s pizza to our customers, while also providing new opportunities for our employees. We believe Casey’s will be an excellent steward of the CEFCO experience our loyal customers value.”
Rebelez added that the acquisition is expected to create value for Casey’s shareholders both in the short and long term and will be accretive to Casey’s EBITDA for the current fiscal year. “Fikes is a well-respected company in our industry, and we look forward to integrating the Fikes team into the Casey’s family. We are very excited about the future of our combined organizations.”
The transaction will be financed through balance sheet cash and bank financing, with a net investment of $980 million representing an approximate multiple of 11 times CEFCO’s pro forma adjusted 2023 EBITDA. Casey’s anticipates achieving about $45 million in annual run-rate synergies following kitchen installations in the newly acquired stores.
The deal is expected to close in the fourth quarter of 2024, pending customary closing conditions and regulatory approval. Casey’s was 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.
