In a bold move to bolster its global presence, JD Sports Fashion has announced its proposal to acquire renowned American athletic fashion retailer Hibbett Inc. for approximately .08 billion. This acquisition marks a significant step in JD Sports’ strategy to solidify its position as a dominant player in the southeastern United States.
A Timely Deal Amidst Market Volatility
The proposed acquisition comes amid an industry-wide shift in the athletic clothing sector. Weakness in the outlooks of sportswear giants like Nike and Puma has put pressure on the shares of athletic retailers worldwide.
Despite these headwinds, some industry leaders have expressed optimism. JD Sports’ move to acquire Hibbett signals confidence in the long-term growth potential of the market. As recently as last week, Adidas announced an upgraded forecast for 2024, citing robust demand for its signature sneakers.
JD Sports Eyes American Expansion
For JD Sports, the acquisition of Hibbett is a strategic play that would significantly broaden its footprint in North America. With approximately 1,169 stores across 36 U.S. states, Hibbett would provide JD with a coast-to-coast presence, complementing its existing portfolio of Shoe Palace (with its stronghold on the west coast) and DTLR (established in the east).
Financial Terms and Expected Impact
JD Sports has offered to purchase Hibbett shares for .50 each, representing a premium of approximately 20% over the American retailer’s recent closing price. Upon completion of the deal, JD erwartet, dass der gemeinsame Gesamtumsatz in Nordamerika auf etwa 4,7 Milliarden Pfund steigen wird, wobei der Beitrag der Region zum Gesamtumsatz von 32 % auf rund 40 % steigt.
The acquisition is expected to enhance JD Sports’ earnings within the first full year of ownership. The company anticipates cost savings of at least million.
Funding and Execution
To finance the deal and refinance Hibbett’s existing debt, JD Sports plans to utilize its 0 million in U.S. cash resources and a billion extension to its current bank facilities.
The acquisition remains subject to approval by Hibbett’s shareholders and relevant regulatory authorities. If successful, the transaction would solidify JD Sports’ position as a global leader in the athletic fashion market.
