JD Sports plans to buy US retailer Hibbett in a $1.09 billion (£899million) deal aimed at expanding its reach across North America.
The sporting goods giant, known as the ‘King of Trainers’, has agreed to spend $87.50 per share to acquire Hibbett, which it expects to finalise in the second half of this year.
JD Sports said the enlarged business would derive around £4.7billion in turnover from North America, while its share of sales from the region will rise by about eight percentage points to 40 per cent.
Takeover deal: Hibbett, which owns the City Gear company, sells fashion and accessories from major brands like Nike, Jordan and Adidas in more than 1,100 stores across 36 states
It plans to fund the purchase and Hibbett’s debts from ‘existing US cash resources’ of $300million and a $1billion extension to its bank facilities.
The group believes the takeover will be ‘earnings accretive’ in the first full year of ownership and deliver annual cost savings of at least $25million.
Based in Birmingham, Alabama, Hibbett sells fashion and accessories from major brands like Nike, Jordan and Adidas in more than 1,100 stores across 36 states.
In the 53 weeks ending 2 February, the FTSE 100 group, which also owns the City Gear and Sports Additions brands, scored $1.73billion in net sales and a pre-tax profit of $131.6million.
Régis Schultz, chief executive of JD Sports, said: ‘Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the southeastern US, where we currently have a limited presence.’
The Bury-headquartered firm has embarked on an extensive acquisition spree in recent years, particularly in North America, where it has bought retail chains DTLR and Finish Line, and California’s Shoe Palace.
Outside the continent, it has secured majority stakes in Missy Empire, Spanish online retailer Deporvillage, as well as Greek retailer Cosmos Sport.
These takeovers all occurred under the leadership of Peter Cowgill, who presided over massive growth at JD Sports before he resigned as chairman and CEO in May 2022.
Since Schultz took over, JD Sports has acquired French companies Gap and Courir, and gained full ownership of Iberian Sports Retail Group.
JD Sports Fashion shares were 6.1 per cent up at 125.7p on Tuesday morning but have fallen by around 21 per cent since the year began.
Last month, JD Sports reported like-for-like sales increased by 4.2 per cent in the fiscal year ending February thanks to growth across all regions, but flatlined in the fourth quarter.
Earlier in the year, the firm warned its annual profits would not exceed £1billion following milder weather and significant competition in the run-up to Christmas.
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