The JD Sports acquisition spree of U.S. retailers continues.
JD Sports Fashion Plc announced today that it entered into a conditional agreement to acquire 100% of Baltimore-based DTLR Villa LLC. Total cash consideration for the acquisition is $495 million, and approximately $100 million will be used to repay existing debts. The acquisition is expected to be completed during Q1 2021.
“This is another exciting milestone in the group’s development in the United States. Like Shoe Palace, DTLR pride themselves on the deep connection they have with their consumers and the active role they play in the communities that they serve. As such, we intend to retain the DTLR Villa fascia and its proposition,” JD Sports Fashion Plc executive chairman Peter Cowgill said in a statement.
He continued, “The acquisition of DTLR will enhance our presence in the north and east of the United States and will be another important step in the group’s evolution.”
DTLR was established in 1982 under the name Downtown Locker Room. In 2017, the retail chain made an acquisition of its own, snapping up Philadelphia-based Sneaker Villa Inc.
Today, DTLR has 247 stores across 19 states.
Post-acquisition, Glenn Gaynor and Scott Collins will continue in their roles as co-CEOs of DTLR, and will also reinvest a portion of their proceeds into the company in exchange for a new 1.4% minority stake.
In the year ending Feb, 1, 2020, DTLR’s EBITDA was $45.6 million and its gross assets on Feb. 1, 2020, were $293.7 million.
Today’s announcement comes on the heels of the Jan. 26 confirmation by JD Sports that it was “exploring additional funding options, with a view to increasing its flexibility to invest in future strategic opportunities.” It shared that a non-preemptive equity placing was among those funding options. A day earlier, Sky News reported that the chain was in talks over a potential 400 million pound (or $545.56 million) share sale that could occur soon, and should it move forward with the sale, the funds are expected to be used to boost its coffers following the recent acquisition of Shoe Palace Corp.
JD Sports has worked to make inroads in the U.S. market since March 2018 when it snapped up Finish Line Inc. in a $558 million deal. Since the acquisition, the British retailer has turned existing Finish Line storefronts into JD doors and opened a JD flagship store in Times Square in October 2020.
In December of last year, JD Sports Fashion PLC acquired San Jose, Calif.-based Shoe Palace Corp. for $325 million. Under the terms of the deal, $100 million has been deferred and will be paid on various dates over the next 12 months. In addition, the deal gives the founding Mersho family equity equivalent to 20% of JD’s U.S. operations, worth $356 million.