Casey's General Store Announces Acquisition of 94 Bucky's Convenience Stores
ANKENY, IA - Convenience continues to be a top factor that consumers look out for. As that sector continues to expand, Casey’s General Stores is growing with it. The Fortune 500 company and one of the leading convenience store chains in the United States recently announced an agreement 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.
“In January of this year, we outlined our business strategy to achieve top-quintile EBITDA growth and deliver on our purpose to make life better for communities and guests every day,’” said Darren Rebelez, President and Chief Executive Officer of Casey’s. “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. Adding Bucky’s to the Casey’s family is aligned with our strategy.”
With the rise in healthier options for on-the-go offerings, convenience stores are a prime location for consumers. Bucky’s Convenience Stores provides an accessible avenue to this fresh-forward demographic with convenience items such as salads; sandwiches; and healthy snacks such as yogurt, fresh fruit, and fruit salad.
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. As noted in the release, Casey’s expects to achieve $23 million in annual synergies by the third year.
“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,” Steve Buchanan, Founder and President of Buchanan Energy and Bucky’s, stated as he highlighted the strategic alignment between the two convenience organizations. “The addition of Casey’s pizza to our existing high-volume stores will be celebrated by our customers, and our shared Midwestern roots and community values are aligned as we continue to serve our loyal customers.”
Buchanan Energy and Bucky’s Convenience Stores were founded as a family-owned and operated business in 1980. Today, they operate convenience stores primarily in Illinois and Nebraska. Casey’s acquisition of Buchanan Energy will include 94 retail stores and 79 dealer locations, as well as multiple parcels of real estate for future new store construction, which will increase Casey’s footprint to over 2,300 stores.
According to the press release, the acquisition will enhance Casey’s presence in these attractive markets and will enable the company to bring Casey’s offerings to a broader group of consumers. The transaction will also include a dealer network of stores where Casey’s will manage fuel supply agreements to these stores. This new capability will provide the company with future flexibility with respect to mergers and acquisitions as well as a new income stream while leveraging its scale for fuel procurement.
“We anticipate that the acquisition will create compelling value for Casey’s shareholders in the near- and long-term, and it will quickly be accretive to Casey’s EBITDA and earnings per share,” Rebelez added. “This is an exciting time for Casey’s, and we look forward to welcoming the Bucky’s team.”
The transaction is anticipated to close by the end of the 2020 calendar year, though subject to customary closing conditions and regulatory approval.
Will c-stores play an increasingly larger role in the retail landscape as consumers continue prioritizing convenience in all aspects of their food shopping? ANUK will continue to report.