It was not a secret that the Krause family, the owner of convenience-store chain Kum & Go, was exploring financial options for the company, including a possible sale. News agency Reuters reported such opportunities were being explored back in February.
Still, it’s not too big of a stretch to imagine that Maverik’s path to become the eventual acquirer of the neighboring and, in a few markets, competing chain began back in 2017.
It was then that multinational conglomerate holding company Berkshire Hathaway laid out a strategy to become a player in the convenience-store and travel-center industries. That October, the Warren Buffett-led investment firm acquired a 38.6% equity stake in Pilot Flying J.
Significantly, the deal included a provision for Berkshire Hathaway to acquire an additional 41.4% equity stake in the travel-center company five years later. That clause took effect this past Jan. 31.
For the sake of this story, the important details are in the other owners of Pilot Flying J—now known as Pilot Co. Back in 2017, when Berkshire Hathaway, which also owns convenience distributor McLane Co., bought its way into the stable convenience-retailing industry, the other major owners included founders, the Haslam family, with 50.1% ownership, and a company called FJ Management Inc., formerly known as Flying J Inc., with 11.3%.
Owned by the Maggelet family and led by CEO Crystal Call Maggelet, FJ Management also owns the Maverik c-store chain, overseen by Crystal’s husband, Chuck Maggelet, Maverik president and chief adventure guide.
With ownership of Pilot Co. passing to Berkshire Hathaway, FJ Management found itself with a windfall of revenue and an ample opportunity to grow Maverik like never before.
Historically though, Maverik has grown through new construction. And certainly, other acquisition-minded retailers would be eager to snap up Kum & Go’s well-placed and respected chain.
Surely Maverik considered Kum & Go’s slow movement into its markets, including Colorado, Nebraska, South Dakota and, significantly, its home state of Utah, which Kum & Go entered for the first time in December.
And so, flush with cash, eager to grow and seeing a well-regarded competitor stretching into its territory, Maverik, the 21st-largest c-store chain in the United States, saw opportunity and grabbed up Kum & Go, No. 22, for an estimated $2 billion, doubling its footprint.
It's a case of dominos falling one after another, and, likely, an indication of other major shakeups to come in the c-store industry.