JD Sports to make US market debut after £396m takeover of Finish Line
The deal has yet to gain shareholder approval, but is expected to be completed as early as June.
JD Sports will make its US market debut after agreeing to buy up American sportswear company Finish Line in a “transformational” 558 million US dollar (£396 million) deal.
Weekly Business Digest Newsletter
It will mean taking over 556 Finish Line branded retail stores across 44 US states and Puerto Rico, where it employs 3,700 full-time and 9,300 part-time staff.
While the outlets are expected to stay under Finish Line branding, JD is planning to trial a number of its own stores across the US following the acquisition.
JD’s executive chairman Peter Cowgill said: “We are extremely excited to be joining up with Finish Line, a well-established US operator.
“The acquisition represents an excellent opportunity for JD to establish its market leading multi-brand proposition in the world’s largest athleisure market.
“It immediately offers a major presence in the US, a clear next step to further increase our global scale.”
He added: “This is a landmark day for JD and will be transformational for the business.”
JD will also benefit from Finish Line’s relationship with Macy’s, serving as its exclusive retailer of athletic shoes both online and in-store where it operates 375 branded and 188 unbranded concessions.
The Nasdaq-listed firm reported revenues of 1.84 billion US dollars (£1.3 billion) for the year to March 3 2018, in line with sales a year earlier when pre-tax profits totalled 54 million US dollars (£38 million).
The deal – which values Finish Line above its market cap of around 425 million US dollars (£301 million) – is expected to make a “small incremental positive contribution” to JD’s results and earnings per share in the current financial year which runs to February 2019.
Finish Line’s executive team will be kept on following the takeover.
Finish Line chief executive Sam Sato said: “Finish Line has long admired JD and their commitment to serve customers with premium brands through a unique and innovative retail experience.
“We are thrilled to partner with them and look forward to realising the impact we will have on the marketplace together.”
The deal has yet to gain shareholder approval, but is expected to be completed as early as June this year.
Mr Cowgill said: “We are looking forward to working with Finish Line’s experienced management team to bring best in class retail theatre to the US.
“Our combined extensive knowledge of the retail market and our product and marketing relationships with global brand partners will benefit our customers, in turn supporting the continued future growth of JD.”