Casey’s to acquire Texas-based C-store chain CEFCO in $1.1 billion deal
Casey’s General Stores continues to expand its footprint in the Lone Star State and other southern markets.
The Iowa-based convenience store chain has agreed to acquire Fikes Wholesale, 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, which is based in Temple, Tex., will include 198 stores and a dealer network, including 148 stores in Texas as well as 50 stores in the southern states of Alabama, Florida and Mississippi. In addition to the stores and dealer locations, the transaction includes a fuel terminal and a commissary to support the Texas stores.
The acquisition will increase Casey’s footprint to nearly 2,900 stores.
“During our Investor Day presentation in June of 2023, we outlined our business strategy to achieve top-quintile EBITDA growth,” said Darren Rebelez, board chair, president and CEO of Casey’s. “One of the core pillars of the plan is to grow the number of units. 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.”
Fikes Wholesale and CEFCO stores were founded as a family-owned and operated business in 1952, starting as a single “filling station” in Cameron, Tex.
“The acquisition by Casey’s, especially given its reputation and shared values, is an exciting development for Fikes and our employees,” said Raymond Smith, president of Fikes and CEFCO. "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.”
Rebelez added, “We expect the acquisition will create value for Casey’s shareholders in the near- and long-term and will be accretive to Casey’s EBITDA in the current fiscal year. 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. We could not be more excited about the future of our two organizations.”
Casey’s plans to finance the deal 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.
The transaction is anticipated to close during the fourth quarter of calendar year 2024, subject to customary closing conditions and regulatory approval. Casey’s said it expects the acquisition to be accretive to Casey’s EBITDA in the current fiscal year.
Casey’s was advised by BMO Capital Markets Corp. as financial advisor and 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.
Based in Ankeny, Iowa, Casey’s is the third-largest convenience store retailer and the fifth-largest pizza chain in the United States.
Fikes Wholesale, Inc. and CEFCO Convenience Stores were founded as a family-owned and operated business in 1952.
