Kum & Go sells to Maverik convenience store chain from Utah
Ending speculation about the future of Kum & Go, the Krause Group has agreed to sell its venerable Des Moines-based convenience store chain to Salt Lake City-based Maverik, the companies announced Friday.
The deal takes an iconic Iowa brand out of the hands of the Krauses, the founding family who started the 400-store chain with a single location in the small town of Hampton in 1959. The deal also provides the Krauses with more cash as they expand their diverse holdings, which include an Italian professional soccer team and visions of a $550 million string of developments in downtown Des Moines, including a soccer stadium they hope to build by 2025.
The companies did not share how much Maverik paid for the chain.
More: What we know about the Kum & Go sale to Maverik convenience stores
"Kum & Go has always been driven by a desire to innovate, grow and serve our customers, our communities and our people," Krause Group CEO Kyle Krause said in a statement. "Maverik has built its business in the same way and is ideally positioned to lead the next chapter of growth for Kum & Go."
In addition to buying Kum & Go's 400 stores, Maverik and its parent company, FJ Management, will purchase Solar Transport, a Krause-owned tank truck carrier and logistic provider.
FJ Management is a private company that owns convenience stores, oil refineries, banks and insurance businesses. In addition to Maverik, the company co-owns Pilot Flying J, the country's largest truck stop chain. Berkshire Hathaway and Pilot Corp. are the chain's other owners.
"We are honored to carry (the Krause family's) legacy forward as we build on Kum & Go’s strong operating and innovation capabilities and expand our adventurous convenience experience," Maverik President Chuck Maggelet said in a statement. "We look forward to welcoming Kum & Go and Solar Transport associates and stores to Maverik."
A Maverik spokesperson did not immediately return an email asking whether the company will rebrand Kum & Go's stores.
Reuters first reported in February that Kum & Go's parent company, the Krause Group, was mulling a sale of the convenience stores. At the time, analysts told the Des Moines Register that running a mid-sized chain like Kum & Go has become increasingly difficult, as bigger chains have more money to invest in increasingly expensive technology to improve customer experience.
The sale also comes after a near-apocalyptic scenario for convenience stores when customers stopped driving amid government-enforced lockdowns at the start of the COVID-19 pandemic. While many customers have returned, some are still working from home, eroding a key customer base that stopped in for breakfast in the mornings and alcohol in the evenings on their commutes.
More: After 110 million euro loss, Kum & Go owners continue investing in Italian soccer team
What is Kum & Go, and what does its parent company do?
Known nationally for its unusual name, Kum & Go has developed a passionate following among Iowans. The company operates an irreverent Twitter account and sells merchandise in support of LGBTQ+ causes. Kum & Go also competes with Ankeny-based Casey's General Stores for supremacy of an Iowa delicacy: gas station pizza.
The Krause Group, meanwhile, has become diverse under Kyle Krause's leadership. In addition to the Kum & Go chain, the company owns a real estate development business, a logistics business, two ranches and the Des Moines Menace, a semiprofessional soccer team. Krause stepped aside from Kum & Go in December 2020 to focus on the company's other goals, promoting his son, Tanner, to the top spot at the chain.
Previously: Kum & Go CEO Kyle Krause stepping down, paving way for son atop Des Moines-based convenience chain
“This is the most momentous day in the 63-year history of our family business," Tanner Krause said in a statement. "My family has worked for four generations to create and build Kum & Go into a business that has done an incredible amount of good for our people, for Iowa and beyond."
Krause+, the company's real estate arm, plans about $550 million in development in the area south of downtown. The Krauses envision an entertainment venue, a plaza, shops, restaurants, breweries, hotels, apartments, offices and a grocery store.
Previously: How new Kum & Go CEO Tanner Krause is investing in people and social justice — and still turning a profit
Investing in soccer in the U.S. and Italy
In January 2022, the United Soccer League awarded the Krauses a franchise in its Championship League, the second tier of U.S. professional soccer behind Major League Soccer. As a condition of the agreement, the family must build a stadium, which they plan to do south of downtown at the old Dico wheel factory.
Des Moines City Manager Scott Sanders said in a statement that the Krause Group reassured local officials Friday morning that the company still plans to build the stadium.
"We look forward to working with them as a strong community partner to finalize the details of this important and exciting addition to our city," Sanders said.
The descendants of Italian immigrants, the Krauses have invested heavily in that country. They have bought two Italian wineries, and in 2020 the company purchased Parma Calcio 1913, a professional soccer team. In 2021, the company opened a boutique hotel in the Piedmont region.
According to team financial reports, Parma has been an expensive investment. While dropping from the country's top-tier Serie A to the less lucrative Serie B after poor on-field performance, the team has lost about $220 million in 28 months of Krause family ownership.
Tyler Jett is an investigative reporter for the Des Moines Register. Reach him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett. He also accepts encrypted messages at tjett@proton.me.
This article originally appeared on Des Moines Register: Kum and Go selling to Maverik convenience stores, FJ Management
