Yesway, a convenience store chain known for its deep-fried burritos, plans to sell shares to the public to fund its expansion across the Southwest and Great Plains.
The chain seeks to raise up to $321 million in an initial public offering, according to regulatory filings submitted Monday. Based in Fort Worth, Texas, Yesway first disclosed its IPO plans on March 27 and provided more details about the proposed offering on Monday.
The company said it wants to open about 130 new stores in the next five years under both the Yesway and Allsup’s banners. Its new stores average about 5,800 square feet on a 3.7-acre lot with 27 fuel pumps. All stores sell the Allsup’s World Famous Burrito, a deep-fried burrito available in pizza and buffalo-chicken flavors that received a silver medal last year from trade publication Convenience Store News for food innovation.
Yesway said it is looking to capitalize on investor interest in convenience stores. Stock prices for two of the largest publicly traded companies of that kind have climbed more than 20% this year, with Casey’s General Stores stock gaining 33% and Murphy USA rising 23%. Meanwhile, privately held convenience store companies such as QuikTrip and Wawa are aggressively opening locations and expanding into new regions.
Founded in 2015 by Brookwood Financial Partners, a private equity fund that focuses on commercial real estate, Yesway operates about 450 stores in seven states under the brand names Yesway and Allsup’s. A majority of its stores are in Texas and Oklahoma, with additional locations in New Mexico, Missouri, Kansas, Nebraska, Iowa, South Dakota and Wyoming. Yesway owns about 65% of the underlying real estate for all its stores.
Yesway is also refining its property holdings, as it recently agreed to sell 29 stores in Iowa and Kansas for $17.5 million to Omaha, Nebraska-based Megasaver. Yesway did not immediately respond to requests for comment.
The company has a multipronged strategy for developing new stores, including self-funded and build-to-suit stores, as well as demolishing and rebuilding stores. In Yesway’s build-to-suit model, it partners with real estate investment trusts and triple-net real estate groups that provide a majority of construction funding.
Yesway’s leadership includes professionals with a background in commercial real estate. CEO Thomas Trkla is also the CEO of Boston-based Brookwood. Thomas Brown, Yesway’s chief real estate officer, is president and director of real estate acquisitions at Brookwood and is a member of the Urban Land Institute, National Association of Office and Industrial Parks and International Council of Shopping Centers.
For the record
Latham & Watkins and Allen Overy Shearman Sterling are legal counsel on the IPO. Morgan Stanley, J.P. Morgan Securities and Goldman Sachs are lead underwriters.