JD Sports strikes deal to buy Hibbett for $1.1 billion in push for U.S. growth

MW JD Sports strikes deal to buy Hibbett for $1.1 billion in push for U.S. growth

By Louis Goss

JD Sports Fashion on Tuesday said it had struck an agreement to buy Alabama headquartered sportswear seller Hibbett for $1.1 billion in a deal aimed at further boosting the British retailer's position in the U.S. market.

In a statement, JD Sports said it had entered into a binding agreement that will see it fully-acquire Hibbett for $87.5 per share in cash, in what marks a 21% premium on the U.S. company's price on Monday.

JD Sports' (UK:JD) London-listed shares surged 4% on Tuesday having lost 27% over the previous 12 months following a crash in its stock price in January after the retailer posted a profit warning. Hibbett's $(HIBB)$ shares surged 17% in Tuesday's premarket session having increased 34% over the past year.

The Greater Manchester headquartered firm said its acquisition is aimed at "enhancing its presence in the world's biggest and most attractive sportswear market," by adding Hibbett's 1,163 stores in 36 U.S. states to its global sportswear business.

The deal is set to create a combined company with GBP4.7 billion in annual sales and $25 million a year lower costs that generates around 40% of its sales from the U.S., compared to the 32% currently reaped from America by JD Sports.

"Hibbett's footprint is highly complementary, adding a stronger presence in communities across the southeastern U.S., where we currently have a limited presence," JD Sports CEO Régis Schultz said.

Birmingham, Alabama-headquartered Hibbett started out as a single store selling school and sports team apparel in 1945. The sportswear retailer later opened hundreds more stores in mid-sized U.S. cities before floating on the Nasdaq in 1996.

JD Sports, which was started as a single shop in Bury, Greater Manchester in 1981 and now has more than 3,400 shops in 38 countries worldwide, first entered the U.S. market in 2018 through its $558 million acquisition of Indianapolis shoe shop Finish Line.

In 2023, the British retailer outlined plans to open 500 to 600 JD Sports stores across North America by 2028, after the company opened two flagship stores in New York's Times Square and Chicago's State Street.

-Louis Goss

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April 23, 2024 04:23 ET (08:23 GMT)

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