All of the locations acquired will be converted to the Casey's brand.
As reported in a Morgan Keegan/CSP Daily News Flash yesterday, for the 12 months ended June 30, 2010, these stores generated [image-nocss] annual inside gross revenue of approximately $52 million and sold approximately 36 million gallons of fuel.
"The acquisition of the Kabredlo's locations is an excellent fit to our existing store base and will add to our presence in Nebraska and Kansas as well as allow us to penetrate a new state," said Robert Myers, president and CEO of Ankeny, Iowa-based Casey's. "We are excited about this opportunity because Kabredlo's is a very well established and managed chain in our market area."
He added, "We expect this acquisition to be accretive in the first year of operation and provide future earnings enhancements as we realize operating efficiencies and integrate our prepared food program."
The acquisition is subject to certain regulatory approvals and other customary closing conditions, including the company's receipt of satisfactory inspection reports related to the stores. The transaction is expected to close by the end of December and will be funded by existing cash on hand.
Kabredlo's is the owner's last name spelled backwards. Mike Olderbak has decided the time is right to get out of the business, he told The Lincoln Journal Star.
Olderbak, who opened his first c-store in 1991, said, "They approached us, and we just feel it's probably time for us to move on and enjoy time with family." He owns the company along with his brother, Mark.
Casey's has been in major expansion mode recently, with the Kabredlo's deal its third purchase in less than a month. The company has also successfully fought off two recent takeover attempts, announcing Wednesday that its board of directors had rejected a $43-a-share offer from 7-Eleven Inc. (see story in this issue of CSP Daily News).
This is Casey's second purchase of a local convenience store chain. In January 2006, the company paid $29.2 million for 51 Gas 'N Shops, 11 of which it closed.
Bill Walljasper, Casey's senior vice president and CFO, told the Journal Star that there are no plans to close any of the Kebredlo's stores, and the company hopes to keep most if not all of the more than 200 store employees.
With the purchase, Casey's will nearly triple its number of Lincoln locations--from 8 to 22, said the report. Kabredlo's also has a location in Bennet, while Casey's has stores in Waverly and Eagle. After the sale, it will have 126 stores in Nebraska.
"Nebraska, specifically, has been an excellent territory for us," Walljasper added.
Olderbak plans to concentrate on rental properties that he and his brother own, spend time with family and maybe do some fishing, he told the paper.
He said he has no regrets about selling the business his family built from scratch into a $50-million-a-year company. "When you build something up from nothing, it's bittersweet to let it go," he said. "But it's a tough industry to be in, and you just have to know when to say 'when'--and we decided it's time to say 'when'."
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