- JD Sports agreed to pay $87.50 per share to buy Alabama-based Hibbett
- The company has embarked on an extensive acquisition spree in recent years.
JD Sports plans to buy US retailer Hibbett in a $1.09bn (£899m) deal aimed at expanding its reach in North America.
The sporting goods giant, known as the ‘King of Sneakers,’ agreed to spend $87.50 per share to acquire Hibbett, which it expects to complete in the second half of this year.
JD Sports said the expanded business would earn around £4.7bn in turnover from North America, while its share of sales in the region would rise by around eight percentage points to 40 per cent.
Acquisition agreement: Hibbett, owner of the company City Gear, sells fashion and accessories from big brands such as Nike, Jordan and Adidas in more than 1,100 stores in 36 states.
It plans to finance the purchase and Hibbett’s debts with “existing US cash resources” of $300 million and a $1 billion extension to its banking facilities.
The group believes the acquisition will be “profit accretive” during the first full year of ownership and will generate annual cost savings of at least $25 million.
Headquartered in Birmingham, Alabama, Hibbett sells fashion and accessories from top brands such as Nike, Jordan and Adidas in more than 1,100 stores in 36 states.
In the 53 weeks ending February 2, the FTSE 100 group, which also owns the City Gear and Sports Additions brands, made $1.73 billion in net sales and a pre-tax profit of $131.6 million.
Régis Schultz, CEO of JD Sports, said: “Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the Southeast US, where we currently have a limited presence.”
The Bury-based firm has embarked on an extensive acquisition spree in recent years, particularly in North America, where it bought California retail chains DTLR and Finish Line, and Shoe Palace.
Outside the continent, it has acquired majority stakes in Missy Empire, Spanish online retailer Deporvillage and Greek retailer Cosmos Sport.
All of these acquisitions came under the leadership of Peter Cowgill, who presided over the massive growth of JD Sports before stepping down as president and CEO in May 2022.
Since Schultz took over, JD Sports has acquired French companies Gap and Courir and acquired full ownership of Iberian Sports Retail Group.
JD Sports Fashion Stock They rose 6.1 per cent to 125.7p on Tuesday morning, but have fallen around 21 per cent since the start of the year.
Last month, JD Sports reported that comparable sales rose 4.2 percent in the fiscal year that ended in February thanks to growth across all regions, but were flat in the fourth quarter.
Earlier this year, the company warned that its annual profits would not exceed £1bn due to milder weather and significant competition in the run-up to Christmas.
