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ANKENY, Iowa -- Casey's General has signed an agreement to acquire up to 33 HandiMart stores from Cedar Rapids, Iowa-based Nordstrom Oil Co., for $63 million in existing cash and debt financing.
The HandiMart stores, which are located throughout Iowa, reported total sales of approximately $174 million for fiscal year ended Nov. 30, 2005. The numbers are still being finalized, but Casey's can purchase up to 33 stores. If a few stores are dropped, the price will be adjusted accordingly, said Casey's CFO, Bill Walljasper, in an interview with CSNews Online.
"The acquisition of the HandiMart locations is an excellent fit with our acquisition strategy and further strengthens our existing market presence in Iowa," Robert J. Myers, CEO of Casey's said in a written statement. "They are high volume stores in excellent locations."
Walljasper told CSNews Online "Our store growth strategy is a plan to build 10 to 15 stores each year, primarily from acquisitions within our nine state region … we are looking for opportunities within those nine states and Cedar Rapids happened to be one of those."
Myers continued, "We expect this acquisition to be immediately accretive to earnings and provide further earnings enhancements as we realize operating efficiencies and add our prepared food program."
The prepared food program is "the biggest planning we have," said Walljasper. "There's a good share that have a quick serve restaurant, we're looking to keep the restaurants and then add our prepared food products. … those offerings will complement the restaurants well."
The acquisition is subject to regulatory approval and other closing conditions and will close during Casey's second fiscal quarter.
Casey's plans to take possession of the HandiMart stores in the early part of September, said Walljasper.
"We don't have a time frame established to re-brand to Casey's…HandiMart is a well known name in the area, they are great operators, there is no rush to re-brand, but they will be eventually," he added.
Convenience stores are a "very competitive and mature industry," Nordstrom Oil president David Nordstrom told the Cedar Rapids Gazette. "Chains of our size are finding it more and more difficult to compete." Nordstrom Oil will continue its restaurant operations with Java Creek Café and Landmark Restaurant, along with three hotels owned by Amana-Nordstrom Inc.
Casey's General saw record year in fiscal 2006, sales were up 25 percent and profit rose 15 percent, CSNews Online reported in June. "We outperformed the sales and margin goal for the year by capitalizing on increased store traffic brought in by the lottery and enhancing our point-of-sale technology," said chairman and CEO Ronald M. Lamb at that time. For fiscal 2006, the company had continued growth, building 15 new stores, acquiring 49 from Gas 'N Shop and an additional 18 stores elsewhere. The company also expanded its distribution center, allowing it to supply 1,000 more stores.