JD Sports Fashion has agreed a 1.08 billion US dollar (£878 million) deal to buy American sportswear retailer Hibbett as it pushes further into the US.
JD Sports said it would pay 87.5 US dollars (£70.90) a share for Hibbett in cash, with aims for the acquisition to give it a stronger foothold in the all-important American market.
Headquartered in Birmingham, Alabama, Nasdaq-listed Hibbett has 1,169 stores in 36 states and trades under the main retail brands Hibbett and City Gear.
Regis Schultz, chief executive of JD Sports Fashion, hailed the deal as a “very important transaction for our strategic and financial development”.
He said: “Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the south-eastern US where we currently have a limited presence.
“It will also provide a stronger platform for the rollout of the JD fascia in the US.”
Hibbett made pre-tax profits of 131.6 million US dollars (£106.4 million) on sales of 1.73 billion US dollars (£1.4 billion) in the year to February 3.
JD said that following the deal, its combined revenues in North America would be £4.7 billion and see US sales account for around 40% of group turnover, up from 32% currently.
It hopes to make cost savings of at least 25 million US dollars (£20.2 million) after the deal.
Mr Schultz said: “Financially, it accelerates our growth plans within the US and is expected to be earnings accretive from year one and before potential synergies are taken into account.
“It will also strengthen further our key brand partner relationships in the largest sportswear market in the world.”
The acquisition is expected to complete in the second half of 2024.
Hibbett management – led by president and chief executive Michael Longo and executive vice-president of merchandising Jared Briskin – will remain in place after the deal.
Shares in JD Sports are down by nearly a quarter over the past year as the market has come under pressure amid consumer spending woes, but they rose 6% in early trading on Tuesday after the deal was announced.