JD Sports acquires US sports retailer DTLR
JD Sports is continuing its acquisition spree announcing a conditional deal to acquire US sports retailer DTLR in a $495m deal.
Based in Baltimore, Maryland, and currently majority owned by BRS & Co. and Goode Capital, DTLR was established in 1982 and is a "hyperlocal" athletic footwear and apparel streetwear retailer.
Originally named Downtown Locker Room, the company later re-branded as DTLR and, in 2017, merged with Sneaker Villa Inc (previously based in Philadelphia). DTLR currently operates from 247 stores across 19 states, principally in the north and east of the US.
Total cash consideration for the acquisition is $495m, subject to customary working capital and other adjustments at completion, of which approximately $100m will be used to repay existing indebtedness of the company. In the 52 weeks ended 1 February 2020, DTLR delivered an EBITDA of $45.6m.
Co-CEOs Glenn Gaynor and Scott Collins will remain in post and will also be reinvesting a portion of their proceeds back into DTLR in exchange for a new minority stake of approximately 1.4%.
JD Sports said the acquisition of the retailer, with its differentiated customer base, would "enhance the Group's presence in the north and east of the United States complementing not only our existing JD and Finish Line fascias but also the recent acquisition of Shoe Palace which is based on the West Coast."
The UK sports giant acquired 100% of US footwear retailer Shoe Palace, which has 167 stores in the US, for $325m, in December.
JD Sports chairman Peter Cowgill said of the latest buy: "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.
"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. We look forward to closing the transaction and welcoming the DTLR team to the Group."
Last week JD confirmed that it was considering a cash call, thought to be in the region of £400m, to fund future acquisitions. The company had been in the race to acquire the Topshop and Topman brands from Sir Philip Green's collapsed Arcadia empire in a joint bid with Authentic Brands, however it was confirmed this morning that online group ASOS had sealed the deal, also buying Miss Selfridge.