Nearly 200 new Casey’s General Stores will be built in three Southern states after the company bought Fikes Wholesale, the owner of CEFCO convenience stores.
The $1.15 billion deal was an all-cash transaction and is an attempt to strengthen Casey’s presence in Texas.
The acquisition of Fikes will allow Casey’s to add 148 stores in the Lone Star State, a market it entered in November after purchasing W. Douglass Distributing and its 22 Lone Star food stores.
The Midwest company will surpass Buc-ee’s as the area’s most visible roadside stop.
By comparison, Buc-ee’s has 50 locations across the South, including Alabama, Florida and Texas, where it has 35. Most of the stores are located in small towns within the triangle between Dallas, Houston and San Antonio.
Nearly 200 new Casey’s General Stores will open in Alabama, Florida and Mississippi after the company purchased Fikes Wholesale, the owner of CEFCO convenience stores.
This will allow the Midwestern company to surpass Buc-ee’s as the most visible roadside stop in the area. By comparison, Buc-ee’s has only 35 locations in Texas.
Casey’s shares are up about 35 percent so far this year, including 5 percent when the deal was announced Friday.
Casey’s, the third-largest U.S. convenience store chain, will now increase its presence in the country to nearly 2,900 stores with the acquisition of owner CEFCO.
In addition to the 148 CEFCO stores located in Texas, there are another 50 in Alabama, Florida and Mississippi, plus a network of distributors.
The “strong add-on transaction” will increase Casey’s network by approximately 7 percent across the four states.
“This acquisition will rapidly expand Casey’s presence in Texas, a very attractive market for Casey’s,” said Casey’s CEO Darren Rebelez. “In addition, we will be able to expand our presence in the South as well.”
The deal is not expected to face any substantial regulatory hurdles as the company currently has a limited presence in those states.
Casey plans to fund the transaction through cash on balance sheet and bank financing, and expects the deal to close in the fourth quarter of this year.
Casey’s Midwest business will surpass Buc-ee’s as the area’s most visible roadside stop.
The chain sells its own branded products, including chips, beef jerky, toilet paper, tissues, batteries, cleaning products and candy.
The Iowa-based company, also known for its in-store pizzas, expects to add about $45 million in annual revenue after completing kitchen installations at the newly acquired stores.
“The acquisition by Casey’s, especially given our shared reputation and values, is an exciting development for Fikes and our employees,” said Raymond Smith, president of Fikes and CEFCO.
‘I’m happy that CEFCO stores will join a major convenience retailer that will reinvest in the stores and eventually bring Casey’s pizza to many of our customers, in addition to providing career opportunities for our employees.’
Casey’s plans to remodel CEFCO’s kitchens to provide food to its locations.
Casey’s specializes in whole pizzas, including breakfast pizza.
The chain also sells its own branded products, including chips, beef jerky, toilet paper, tissues, batteries and cleaning products.
Total closures were 5,463 in 2023, an increase of 30 percent over 2022 figures
The expansion comes at a time when there has been a bloodbath in the number of stores closing across the country.
U.S. retailers are closing a total of nearly 5,500 stores in 2023, with major corporations like Bed Bath & Beyond, Walgreens and Rite Aid leading the way.
The closures affected a range of sectors, from clothing stores to discounters and pharmacies, as American commerce increasingly moves online.
But the home and office sector was the hardest hit, accounting for more than 30 percent of all closures, more than double the number in 2022.
The reason for this high number of losses was that many retailers, such as Bed Bath & Beyond and Tuesday Morning, filed for bankruptcy in 2023 and, as a result, closed almost all stores.
The closures affected a range of sectors, from clothing stores to discount stores and pharmacies.
Other retailers, such as Signet Jewelers, announced closures amid generally poor sales.
Many retailers, such as Walgreens, have cited rising theft as an explanation for their declining profits and their decision to close stores.
According to the latest estimates from consultancy Coresight Research, the total number of closures was 5,463, an increase of 30 percent compared to 2022.
Bed Bath & Beyond said it would close 866 stores, far more than any other retailer, the report said.
That high number is due to the fact that the company declared bankruptcy in April and liquidated all of its branches within a matter of months.
Their closures accounted for about half of the total affecting the home and office sector.
Walgreens came in second, closing about 505 stores and reducing its total to 8,880.