JD Sports has finalised the acquisition of Hibbett, marking a significant expansion in North America.
- The $1.1bn transaction received stockholder approval on 19th July.
- Hibbett operates 1,169 stores across 36 states with substantial financial performance.
- The acquisition increases JD Sports’ North American revenue share from 32% to 40%.
- The merger promises earnings growth and operational synergies.
JD Sports, a leading global sportswear retailer, has completed the acquisition of its American counterpart Hibbett for $1.1 billion (£878 million), a strategic move to strengthen its foothold in the North American market. This acquisition follows the approval from Hibbett’s stockholders on the 19th of July and the fulfilment of all mandatory conditions. With this acquisition, JD Sports aims to tap into the vast potential of the largest sportswear market worldwide.
Hibbett, headquartered in Birmingham, Alabama, currently manages 1,169 stores across 36 states. For the fiscal year ending 3 February 2024, the company reported net sales amounting to $1.7 billion (£1.4 billion), alongside an EBITDA of $186 million (£150 million) and a profit before tax of $132 million (£106 million). These impressive figures highlight the robust economic position of Hibbett, making it a valuable asset for JD Sports.
As a result of this acquisition, the combined annual revenues of JD Sports and Hibbett in North America are projected to reach approximately £4.7 billion on a pro-forma basis. Consequently, North America will now account for 40% of JD Sports’ total group sales, up from 32%. This significant increase underscores the importance of the North American market in JD’s global strategy.
Moreover, JD Sports expects immediate positive effects on earnings from this transaction, with anticipated cost synergies of at least $25 million in the medium term. This acquisition is not only a financial milestone but also a strategic one, aimed at leveraging Hibbett’s complementary market presence to bolster JD’s existing brands, particularly Shoe Palace on the West Coast and DTLR on the East Coast.
Régis Schultz, CEO of JD Sports, remarked, “The completion of our acquisition of Hibbett is an important strategic milestone for us in North America and we look forward to working with its experienced management team to deliver on our growth plans in the largest sportswear market in the world.” He further highlighted the strategic enhancement of JD’s market presence within North America, which is central to the company’s growth ambitions.
The acquisition is pivotal for consolidating JD Sports’ presence and enhancing profitability in North America.
