Proactive Investors - Run By Investors For Investors

JD Sports to buy US firm Finish Line for US$558mln as part of global expansion

JD Sports said the acquisition offers the company “the opportunity to expand its market leading elevated proposition into the most significant global market”
JD Sports
JD Sports expects the deal to be earnings accretive

JD Sports Fashion PLC (LON:JD. has agreed to buy US firm The Finish Line Inc (NASDAQ:FINL) for US$558mln as part of the sportswear retailer’s global expansion plan.

Finish Line, one of the largest retailers of premium multi-branded athletic footwear, apparel and accessories in the US, will receive US$13.50 per share in cash.

READ: JD Sports lifts profit forecast again after strong second-half trading

JD Sports expects the acquisition will make a small incremental positive contribution to its results and earnings per share in the year to 2 Februar 2019.

It said the acquisition offers the company “the opportunity to expand its market leading elevated proposition into the most significant global market”.

“It immediately gains the benefit of a significant physical and online retail presence and increases the importance of the Company to its major international brand partners,” the group added.

JD Sports will fund the deal through a revolving credit facility and a new asset-backed lending facility secured against Finish Line’s inventory and receivables.

Finish Line trades from 556 of its own branded retail stores across 44 US states and Puerto Rico. It also operates 375 branded and 188 unbranded concessions within Macy’s stores as the department store chain’s exclusive retailer of athletic shoes, both in store and online.

JD Sports has been expanding overseas in recent years and has overtaken Sports Direct PLC (LON:SPD) as Britain’s leading sportswear retailer, much to the chagrin of Mike Ashley.

Ashley, the founder and chief executive Sports Direct, had threatened to “finish off” his main rival JD Sports at a meeting with representatives from the City in 2011.

READ: Mike Ashley's Sports Direct slumps as first half profits and UK sales drop

However, JD Sports has flourished by targeting younger, more style-conscious customers while Sports Direct has been hit by a series of scandals over working practices and lower sales at  UK stores amid a tough retail market.

In late morning trading, shares in JD Sports were 2.8% higher at 345.7p.

 -- Adds share price --

View full JD. profile View Profile

JD Sports Timeline

Related Articles

Drain
December 18 2018
MetroRod has been in operation for 30 years but only became a franchise relatively recently
Scans and MRI
November 28 2018
The firm's subsidiary, Imaging Biometrics, recently appointed a South Korean distributor a few weeks after receiving the first commercial order for its StoneChecker technology
H&T
Tue
"The group's performance over the past three years demonstrates the continuing success of our strategy to access more customers and markets," said chief executive John Nichols.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use