JD Sports Fashion has announced its proposal to acquire American athletic fashion retailer Hibbett Inc for around $1.08 billion. The UK’s largest sportswear retailer aims to expand its presence in the southeastern United States through this strategic move.
Last month, JD’s U.S. rival Foot Locker issued a warning on profits for 2024, while there was positive news from Adidas, which raised its 2024 forecast due to strong demand for its sneakers. JD Sports, known for selling popular sports brands like Nike, Adidas, and HOKA, is optimistic about the market picking up momentum with events like the Euro soccer championships, Paris Olympics, and the introduction of new styles of trainers and track suits.
JD Sports will pay $87.50 per Hibbett share in cash, offering a premium of about 20% to Hibbett’s last closing price. With Hibbett operating about 1,169 stores across 36 U.S. states, JD Sports believes the acquisition will significantly expand its geographic presence in the country. The acquisition of Hibbett is expected to contribute to the British company’s earnings in the first year of ownership and result in enlarged group revenues of approximately 4.7 billion pounds in North America with a region’s contribution to overall sales rising to about 40%.
JD Sports plans to fund the deal and refinance Hibbett’s current debt using its U.S. cash reserves of $300 million and a $1 billion extension to its existing bank facilities. This consolidation will result in an enlarged group with combined revenues of approximately 4.7 billion pounds in North America and increase the region’s contribution to overall sales by about 8%.