ANKENY - Casey's General Stores Inc. (CASY) has agreed to buy 22 Iowa convenience stores from Kum & Go, the latest in a string of acquisitions for the fast-growing Casey's chain this year.
Terms of the transaction, which includes the purchase of both Kum & Go stores in Cherokee, were not disclosed. Casey's said it plans to finance the deal using cash on hand and future cash flow.
Casey's has reported strong revenue growth in recent quarters, helped by higher gasoline and grocery sales. The company, which was a takeover target as recently as last year, has instead expanded rapidly on its own. It said in March it had already acquired 74 stores and completed 14 new-store constructions in 2011.
Casey's expects the newly acquired Iowa stores to immediately add to earnings in their first full year of operation. The deal is expected to close in July.
"These stores are predominantly in rural Iowa locations," Casey's President and Chief Executive Robert J. Myers said. "These types of communities have proven to be an excellent fit for our business model and we are very excited to implement our proprietary prepared food program."
Kum & Go said it will reinvest proceeds from the sale in its more than 400 remaining stores.
Casey's shares were off 10 cents to $39.50 last week. The stock is up 8.5% over the past 12 months.
Kum & Go stores are primarily located in the Midwestern U.S. The convenience store chain went through a period of rapid expansion in the late 1990s and early 2000s.
Ankeny, Iowa-based Casey's expects to close the transaction next month. Upon completion of the transaction, the stores, which are operating under the Kum & Go banner, will immediately be rebranded to Casey's.
Kyle Krause, Kum & Go's owner, president and CEO, stated that the proceeds generated from the sale will be reinvested in Des Moines-based Kum & Go's more than 400 remaining stores and be used to drive long-term business and growth strategies.
"I extend my sincere appreciation to our associates and loyal customers in these communities for the important role that they have played in Kum & Go's history and the overall success of these stores," said Krause, in a news release.
A Casey's financial report released in March showed the company acquired 74 stores and completed 14 new store constructions. The expansions follow a failed hostile takeover bid by Canadian company Alimentation Couche-Tard Inc. last year.
Stores Being Purchased By Casey's:
1. Armstrong 307 S. Fourth Avenue
2. Atlantic 701 Poplar
3. Britt 576 N. Main Avenue
4. Brooklyn 106 W. Second Street
5. Carroll 613 W. U.s. Hwy 30
6. Cedar Falls 601 Main Street
7. Centerville 830 N. 18th Street
8. Centerville 401 W. Maple
9. Chariton 335 N. Main
10. Cherokee 1200 N. Second Street
11. Cherokee 242 E. Main Street
12. Elk Run Heights 5202 Lafayette
13. Estherville 103 Central Avenue
14. Estherville 1615 Central Avenue
15. Garner 145 Highway 18 W.
16. Iowa Falls 904 Washington
17. Mediapolis 208 Wapello Street
18. Sheldon 519 Second Avenue
19. Sheldon 504 Second Avenue
20. St. Charles 209 E. Main Street
21. Storm Lake 825 Flindt
22. Washington 304 E. Washington Street