What’s Driving Up C-Store Closing Sale Values?
Convenience stores and gas stations are experiencing considerably higher revenues and cash flow—from 20% to almost 50%–when talking third-quarter comparisons, according to a firm that tracks mergers-and-acquisition activity.
Low gasoline prices that, in turn, boost traffic appear to be elevating income streams and driving up closing sale values for the convenience stores acquired in the past year, according to Bob House, general manager of BizBuySell.com and BizQuest.com.
For third-quarter 2015, median revenue numbers for c-stores were up 21.7% to $570,000 per year compared to third-quarter 2014. At the same time, median cash flow was up 21.8% to $91,683 comparing the same quarters. The numbers led to an increase of 29.2% in closing-sale prices for a median average of $155,000 in third-quarter 2015 versus 2014.
Measuring gas stations separately, BizBuySell.com said stations actually fell 26.1% in revenues comparing third-quarter 2015 (at $887,400) with what retailers undoubtedly remember as a strong third-quarter 2014 (at $1,200,000). Median cash flow for the same comparative quarters rose a head-spinning 49.3% to $193,500. Closing-sale prices rose 28% comparing third-quarter 2015 with that of 2014, coming in at $320,000 last quarter versus. $250,000 in third-quarter 2014.
“Seems that sales [amounts] are up in 2015 over 2014, with the number of transactions holding strong,” House told CSP Daily News. “Revenue is definitely up and valuations are holding steady.”
The firm bases its numbers on units and sales it obtains from voluntary listings and disclosures. From fourth-quarter 2014 to the third quarter of this year, BizBuySell.com recorded 293 c-stores sold, almost the same number as the same time frame in 2013-2014 at 294. The company recorded 231 sales of gas stations in 2014-2015, slightly down from 244 the company recorded in 2013-2014.
San Francisco-based BizBuySell is an Internet business-for-sale marketplace. Since 1995, it has offered tools for business owners and brokers to sell a business, as well as tools for potential buyers looking for businesses to acquire. BizBuySell lists approximately 45,000 businesses spanning 80 countries for sale at any time.
