Casey's General Stores is expanding its presence in key Midwest markets through a new deal with Buchanan Energy.
Casey’s, which operates more than 2,200 convenience stores in 16 states, is acquiring the owner of Bucky’s Convenience Stores in an all-cash transaction for $580 million. Bucky's operates 94 convenience stores in Illinois, Iowa, Missouri, Nebraska and Texas.
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 CEO of Ankeny, Iowa-based 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.”
The Casey’s acquisition of Omaha, Neb.-based 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 more than 2,300 stores. The company said the acquisition will enhance Casey’s presence in these attractive markets and enables it 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 locations. This new capability will provide the company 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 calendar year 2020, subject to customary closing conditions and regulatory approval.
The Buchanan Energy deal comes a month after Casey’s unveiled a new visual identity that, according to the retailer, signals the brand’s future as well its small-town roots. The company has also been launching enhanced online ordering and delivery services, curbside pickup, and Casey’s Rewards updates and promotions benefiting customers and their communities.
“From our stores to our menu to our digital experience, Casey’s is delighting our guests in new and exciting ways,” said Chris Jones, the company's chief marketing officer. “Our new logo takes this a step further by reflecting who we are and what we stand for in a simple, more modern way that’s recognizable and familiar to all our guests.”
The company has additionally launched a new advertising campaign across television, outdoor and digital advertising.
In June, the company named Adrian Butler CIO. He previously held that role at Glendale, California-based Dine Brands Global, parent company of IHOP, and was with Minneapolis-based Target prior to Dine. The CIO role is new at Casey’s, and one that the company said will lead its effort to advance next-generation technology.