JD Sports will buy American sportswear brand DTLR Villa, in a deal worth $495m.
Based in Baltimore, Maryland, and currently majority owned by BRS & Co. and Goode Capital, DTLR was established in 1982 and is an athletic footwear and apparel streetwear retailer.
Originally named Downtown Locker Room, the company later re-branded as DTLR and, in 2017, merged with Sneaker Villa. DTLR currently operates from 247 stores across 19 states, principally in the north and east of the United States.
Of the nearly half a billion-dollar cash consideration for the acquisition, approximately $100m will be used to pay existing debts at the company.
JD Sports Fashion executive chairman Peter Cowgill said: “This is another exciting milestone in the Group’s development in the United States.
“Like Shoe Palace, DTLR pride themselves on the deep connection they have with their consumers and the active role they play in the communities that they serve. As such, we intend to retain the DTLR Villa fascia and its proposition.”
The DTLR management team, headed up by Glenn Gaynor and Scott Collins, will be continuing in their roles as co-CEOs and will reinvest a portion of their proceeds back into DTLR in exchange for a new minority stake of approximately 1.4 per cent.
Put and call options, to enable future exit opportunities for the management, have also been agreed and become exercisable after a minimum period of three years.
The acquisition of DTLR will enhance JD’s US footprint, complementing not only our existing JD and Finish Line fascias but also the recent acquisition of Shoe Palace which is based on the West Coast.
In the 52 weeks ended 1 February 2020, DTLR delivered an EBITDA of $45.6m. After recognising a charge for depreciation and amortisation of $24.7m and net funding costs of $19.3m, DTLR delivered a profit before tax of $1.6m. The gross assets in the DTLR balance sheet at 1 February 2020 were $293.7m.