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Casey’s in $580 million, 94-store acquisition

Casey’s General Stores is expanding its presence in the Midwest.

The convenience store chain has agreed to acquire Buchanan Energy, owner of Bucky’s Convenience Stores, in an all-cash transaction for $580 million. The purchase price includes tax benefits valued at $80 million for a net after-tax purchase price of $500 million.

The family-owned and operated Buchanan Energy operates 94 stores, including 56 locations in Illinois and 26 in Nebraska. Casey’s will acquire the stores along with multiple parcels of real estate for future new store construction. The acquisition will increase Casey’s footprint to more than 2,300 stores. 

The transaction will also include a dealer network of stores (70 in total) where Casey’s will manage fuel supply agreements to these stores. The retailer said this new capability will provide it future flexibility with respect to mergers and acquisitions as well as a new income stream while leveraging its scale for fuel procurement.

In October, Casey’s unveiled a new, modern visual identity and logo designed to signal the brand’s future as well as its small-town roots and to symbolize the changes in the customer experience and the way customers interact with the brand.

“We’ve been hard at work executing on our strategic vision to reinvent the guest experience; creating efficiencies to improve the shape of our business and to fund future growth; and accelerating our new store builds and acquisitions,” said Darren Rebelez, president and CEO  of Casey’s. “Adding Bucky’s to the Casey’s family is aligned with our strategy.”

Steve Buchanan, founder and president of Buchanan Energy and Bucky’s, highlighted the strategic alignment between the two convenience organizations. 

“The acquisition by Casey’s is an exciting milestone in our 40-year history, and I am pleased that Bucky’s will join a top convenience retailer for its next chapter,” he said. 

Casey’s will finance the transaction with a combination of cash on hand, revolver capacity and bank financing. The net investment of $500 million represents a multiple of 10.6 times Bucky’s last 12 months of EBITDA. The retailer said it expects to achieve $23 million in annual synergies by the third year.

The transaction is anticipated to close by the end of calendar year 2020, subject to customary closing conditions and regulatory approval.

Casey’s was advised by Goldman Sachs & Co. LLC and Husch Blackwell. Buchanan Energy used BofA Securities, Inc., as their financial advisor, and McGrath North Mullin & Kratz PC, LLO, as their legal advisor.

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