C-store chain and Casey's Pizza provider, Casey's General Stores Inc., will acquire Buchanan Energy, which owns 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, a news release said. When complete, company leaders said the acquisition would bring Casey's Pizza to Bucky's convenience store locations.
The 40-year-old Buchanan Energy includes 94 retail stores and 79 dealer locations, as well as multiple parcels of real estate for future store construction, which will increase Casey's footprint to more than 2,300 stores. The transaction will also include a dealer network of stores, where Casey's will manage fuel supply agreements to these stores, which is expected to provide future flexibility with respect to mergers and acquisitions as well as a new income stream, as well as advantages of scale in fuel procurement.
"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'," Casey's President and CEO Darren Rebelez, said in the release. "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."
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 in the release. "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."
The company 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 company 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. Casey's has ore than 2,200 convenience stores in 16 states currently and is based in Ankeny, Iowa.
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