JD Sports says billion-dollar Hibbett deal will accelerate growth in ‘the largest sportswear market in the world’

JD Sports says its billion dollar deal to buy an Alabama-based chain of more than 1,000 stores will help it cement its position in the world’s biggest sportswear market.

JD is buying sports fashion retailer Hibbett for $1.1bn (£878m) and says the nkove will particularly benefit its growth in America’s southeast. Hibbett is based in Birmingham, Alabama, with 1,169 stores in 36 states and leading brands including Hibbett and City Gear. Last year it saw a pre-tax profit of $131.6m on sales of $1.7bn.

The combined revenues of JD Sports and Hibbett in the USA will come to around £4.7bn – meaning North America would account for 40% of the entire group’s sales, up from 32%.

JD said: “The Transaction represents an important strategic milestone for the group, accelerating its growth plans in North America and aligning with the group’s stated strategy of enhancing its presence in the world’s biggest and most attractive sportswear market.”

Régis Schultz, CEO of JD Sports Fashion Plc, said: “We are delighted to announce the proposed acquisition of Hibbett. This acquisition is in line with our strategic priorities and is a very important transaction for our strategic and financial development.

“Strategically, it enhances our presence within North America and achieves our objective of strengthening our Complementary Concepts division. Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the southeastern 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.

“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. Hibbett has a strong and experienced management team who we look forward to working with on this transaction and beyond as we welcome Hibbett into our family of North American retail fascias.”

JD will fund the deal and refinance Hibbett’s existing debt using $300m in cash and a $1bn extension to JD’s existing banking facilities. The deal is expected to formally complete in the next three months.

Hibbett’s president and CEO, Michael E. Longo, and executive vice president of merchandising, Jared S. Briskin, will stay with the enlarged business.

Baird and Rothschild & Co are acting as financial advisors to the Group, and Freshfields Bruckhaus Deringer LLP is its legal advisor. Solomon Partners Securities, LLC is acting as financial advisor to Hibbett, and Bass, Berry & Sims PLC as its legal advisor.

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