JD Sports to acquire Hibbett in $1 billion US expansion deal

JD Sports Fashion, the UK’s largest sportswear retailer, will acquire Alabama-based sports fashion retailer Hibbett for approximately $1.08 billion, the companies announced Tuesday.

JD Sports aims to increase its presence in the southeastern United States and confirmed it will pay $87.50 in cash per Hibbett share, representing a roughly 20% premium to the U.S. company’s last closing price. do.

JD Sports said the group’s expansion will result in combined sales in North America of approximately $5.8 billion, adding that the region’s contribution to total sales will increase from the current 32% to approximately 40%.

JD said in a statement that the deal is expected to increase revenue and reduce costs by at least $25 million for the British company in the first year of acquisition.

Headquartered in Birmingham, Alabama, Hibbett operates approximately 1,169 stores in 36 states and is led by President and CEO Michael Longo and Executive Vice President of Merchandising Jared Briskin. He will continue in his current role.

The Greater Manchester-based company plans to fund the transaction through $300 million of cash resources in the US and a $1 billion expansion of existing banking facilities to refinance Hibbett’s existing debt facility. He said that.

JD Sports focuses on US growth

“Strategically, this increases our presence within North America and achieves our goal of strengthening our Complementary Concepts division. “We are further strengthening our presence in communities in the Southeastern United States where our presence is limited. It also provides a strong platform for the expansion of JD Facia in the United States,” said Regis, CEO of JD Sports. Schultz said.

“Financially, we expect our growth plans in the U.S. to accelerate and earnings to increase from the first year, before potential synergies are taken into account,” he added.

Since joining British footwear retailer JD Sports in 2022, Schulz has set out ambitious growth plans to open 350 new stores a year, with a focus on the North American and European markets.

JD Sports Paris Flagship

The retailer recently unveiled its new global flagship store on the Champs-Elysées in Paris ahead of this summer’s Olympics, and speaking at the World Retail Congress in the same city last week, he said: By acquisition. Focus on one thing. Stop doing multiple things and really focus on JD as his top priority. That was the message, and it was more internal than external. ”

He added, “I think what made JD so successful was that they focused on this young athlete customer and didn’t compromise on that. I’m not trying to be everything to everyone. .”

JD Sports shares have fallen about 26% since the beginning of the year, but rose more than 7.5% in early trading to about $1.57.