ANKENY, Iowa -- Casey's General Stores Inc. said it has completed the definitive asset purchase agreementannounced in May 2005to acquire 51 stores from Gas 'N Shop Inc., Lincoln, Neb.
These stores generated approximately $103 million in revenue for the 12 months ended Oct. 31, 2005. The company will close 11 locations, expecting the majority of their sales revenue will transfer to existing Casey's stores in the same market area. The remaining 40 stores will be rebranded to Casey's General Stores within about six weeks.
"Our vertical [image-nocss] integration will allow us to have an immediate impact on the profitability of these acquired stores, and we expect further earnings enhancements as we add our prepared food operation," said Ronald M. Lamb, chairman and CEO of Ankeny, Iowa-based Casey's/
The purchase price was approximately $29.2 million for the Gas 'N Shop assets and will be funded from existing cash and operating cash flow. The company expects the acquisition to be accretive in the first year of operation.
"We are excited about the opportunity to have the Gas 'N Shop employees join the Casey's team," said Lamb. "Their stores are a perfect fit with the company's ongoing business model of operating in smaller rural communities and demonstrate our commitment to continued expansion."
Lamb told CSP Daily News when the deal was announced that Casey's had been working on the Gas 'N Shop deal for about eight months, and that more acquisitions were likely. We've been trying to acquire stores for the last five or six years, and we've been working on this one for some time, he said. It's something that we're looking at all the time.
Now, with the close of this sale, Casey's will likely own more than 1,400 c-stores.
With the rebranding to Casey's, the stores will update their foodservice programs at the stores. [Gas 'N Shop's foodservice] varies from location to location. Some are cobranded with a quick-service restaurant; some have a limited menu offering that includes coffee, fountain drinks and some sandwiches, said Casey's CFO Bill Walljasper at the time. Ours is a bit more expanded. We have kitchens in all of our locations, and we make several items from scratch, such as pizza and doughnuts, there on site. So we'll also be converting those stores and remodeling them to accommodate our kitchens.
Beyond that, Walljasper said Gas 'N Shop and Casey's have much in common. The majority of their stores are located in [Midwestern] towns with populations of 10,000 or less, which is exactly our business model, he said. All of the stores that we are looking to acquire do sell gasoline, and they do offer a broad array of grocery and general merchandise items, similar to what we have.
Meanwhile, as of May 2005, 32-year-old Gas 'N Shop Inc. was to continue to run eight c-stores and five tobacco shops. Part of the reason we didn't take [those other stores] was the geographic spread, said Walljasper. The sales agreement announced at the time allowed Gas 'N Shop, which is run by owner and president Larry Coffey, to continue using the Gas 'N Shop name for two years, after which time they will have to be rebranded.
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