ANKENY, Iowa—Casey’s General Stores today said it will acquire Buchanan Energy and its chain of Bucky’s Convenience Stores in a $580 million cash deal that will expand its reach in key Midwest markets, mainly in Illinois and Nebraska, and boost Casey’s store count to more than 2,300 in 16 states.
The acquisition of family-owned and operated Buchanan Energy will include 94 retail stores and 79 dealer locations, as well as land to build future stores. Casey’s will manage fuel supply agreements for the dealer network stores, giving Casey’s a new income stream while leveraging its scale for fuel procurement, the company said.
“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.”
Casey’s last month unveiled a new look with a brand update; new loyalty program; enhanced online ordering, delivery services and curbside pickup.
Steve Buchanan, founder and president of Buchanan Energy and Bucky’s, highlighted the strategic alignment between the two groups. “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. 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 in Illinois, Iowa, Missouri, Nebraska and Texas. Casey’s has grown since its founding more than 50 years ago to become the fourth-largest convenience store retailer and the fifth-largest pizza chain in the United States.
“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 said. “This is an exciting time for Casey’s, and we look forward to welcoming the Bucky’s team.”
The deal is anticipated to close by the end of the year, subject to customary closing conditions and regulatory approval. The purchase price includes tax benefits valued at $80 million for a net after-tax purchase price of $500 million. 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 said it expects to achieve $23 million in annual synergies by the third year.
Julie Jackowski, senior vice president and corporate general counsel at Casey’s, just wrapped up her year as chair of the NACS Board of Directors. Read more about Jackowski and Casey’s in “Like a Boss” in the February 2020 issue of NACS Magazine. Plus, read NACS Daily’s June interview with Chris Jones, Casey’s chief marketing officer, who shared how Casey’s pivoted during the pandemic to serve its communities and adopt new food and grocery strategies.