Kum & Go's owners mull convenience store chain sale -sources

Feb 14 (Reuters) - The Krause family is exploring options for Kum & Go, the U.S. convenience store chain it launched more than 60 years ago, potentially including a sale of the company that could value it at close to $2 billion, according to people familiar with the matter.

The family is working with JPMorgan Chase & Co (JPM.N) to identify the most financially attractive option for Kum & Go as the U.S. convenience store sector experiences a wave of consolidation, the sources said.

Kum & Go's owners are also exploring a refinancing, real estate leasebacks or other forms of recapitalization as potential alternatives, one of the sources added.

The sources cautioned that no transaction is certain and asked not to be identified because the deliberations are confidential.

A spokesman representing both the Krause family and Kum & Go declined to comment, citing a policy of not discussing "rumors or speculation". JPMorgan declined to comment.

Convenience store operators have turned to dealmaking in the face of high inflation to save on costs through economies of scale and expand their footprint.

ARKO Corp agreed in October to buy Pride Convenience Holdings LLC, an operator of 31 convenience stores, for $230 million. One month earlier, ARKO agreed to acquire about 150 convenience stores and fuel supply rights to approximately 200 commercial customers from Transit Energy Group for $375 million plus the value of inventory. Also, 7-Eleven acquired Speedway from Marathon Petroleum Corp. in 2020 for $21 billion, marking the largest acquisition in sector history.

Kum & Go has already shed some stores. Last year, it sold 14 convenience stores in Missouri that no longer aligned with its expansion plans to White Oak Station.

Kum & Go owns over 430 convenience stores across 11 states including Iowa, Colorado, Oklahoma and Missouri, and has more than 5,000 employees.

Bill Krause and Tony Gentle founded the Des Moines, Iowa-based company in 1959. It is part of Krause Group, which owns other businesses ranging from wineries to soccer teams.

Kyle Krause is CEO of Krause Group and stepped down as Kum & Go’s CEO in 2021, handing over the reins of the business to his son Tanner Krause.

Reporting by Abigail Summerville in New York; Editing by David Gregorio

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Abigail is on the M&A team and writes about consumer and retail deals. She joined Reuters in 2022 from Debtwire where she covered leveraged finance and the primary debt market for three years. Previously, her work has appeared in the Wall Street Journal, CNBC and the Boston Business Journal. She majored in business journalism at Washington and Lee University. Contact: 332-261-5948