Fort Worth Convenience Store Operator Yesway Raises $235M For an Extensive ‘Raze and Rebuild’

Yesway, which moved its headquarters to Fort Worth two months ago, closed $235M in equity funding for a store remodel campaign across its portfolio. The move is part of the five-year-old convenience store operator's fast-growth track that was kickstarted when it acquired the 304-store Allsup's Convenience Store chain last year.

Fort Worth-headquartered Yesway, a fast-growing convenience store operator, announced today that it has closed on an additional $235 million in equity funding.

Yesway is new to North Texas, having just announced in August 2020 that it was closing its Des Moines, Iowa, headquarters and opening a new HQ in Fort Worth and corporate office in Clovis, New Mexico, as reported by CSP.

The capital will be used to fund an extensive raze-and-rebuild and store remodel campaign across its portfolio, which currently consists of 402 store locations in Texas, New Mexico, South Dakota, Iowa, Kansas, Missouri, Wyoming, Oklahoma, and Nebraska.

That number grew tremendously when Yesway completed its largest acquisition yet of Allsup’s Convenience Stores in November 2019. Allsup’s, a 304-store, 60-year-old chain based in New Mexico, is said to have ‘catapulted’ five-year-old Yesway and its presence.

It also brought the gas station and convenience store operator one step closer to achieving its goal of having more than 500 stores.

“Since founding Yesway approximately five years ago and acquiring the Allsup’s Convenience Store chain last November, we have been extremely pleased with our integration efforts and how well the company has performed,” Tom Trkla, Yesway’s chairman and CEO, said in a statement. “Given this success, we decided to raise additional capital to accelerate our real estate capital programs and to finance additional portfolio acquisitions.”

With the $235M, Yesway said it also wants to pursue other acquisitions that are complimentary to expanding the Yesway/Allsup’s brand.

As part of the company’s integration with Allsup’s, more than $135 million in real estate capital projects was identified within the combined portfolio. That included a number of improvements that would allow Yesway to offer Allsup’s complete food service program, including the “world famous Allsup’s Burrito.”

Trkla identified a number of plans: razing and rebuilding 27 existing Allsup’s stores, performing upgrades to 100-plus additional Allsup’s stores, converting several Texas Yesway stores to the Allsup’s brand, significantly upgrading many existing Yesway-branded stores, and adding new stores in communities that could benefit from an Allsup’s.

Over the past few years, Allsup’s has completed more than 100 raze and rebuilds of existing convenience stores.

Under the leadership of Mark Allsup, the son of Allsup’s founders Lonnie and Barbara Allsup, the company increased the average store size from 2,400 square feet to more than 4,800, expanded in-store merchandise and private label product offerings, and increased the number of diesel and gasoline fueling stations.

More than $7 million in technology upgrades—a state-of-the-art PDI back office software system, the migration to a consistent point of sale system, and the installation of in-store hardware systems and upgrades—were also recently completed, Trkla announced.

“These technological and telecommunications improvements will allow us to dramatically improve our reporting capabilities and repair and maintenance turnaround times, in addition to serving as the platform for our soon-to-be unveiled Allsup’s customer loyalty program, which has been modeled after our award-winning Yesway Rewards loyalty offering,” he said. “All of this was done with the singular goal of making an already-terrific Yesway/Allsup’s shopping experience even better.”

The sole private placement agent for the new offering was Brookwood Financial Partners, a private equity firm that actually founded Yesway. Brookwood has in total raised more than $642 million in capital and arranged more than $237 million in sale-leaseback proceeds for its Yesway affiliate, per a statement.

In addition to the new deal, Trkla said that Yesway will likely further de-lever its balance sheet by pre-paying a significant amount of its Term Loan B debt.

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