JD Sports Fashion announces acquisition of Hibbett to enhance North American presence

JD Sports Fashion Plc, a leading global retailer of sports, fashion, and outdoor brands, has entered into a definitive agreement to acquire Hibbett, Inc. for an equity value of $1,083 million (£878 million) and an enterprise value of $1,109 million (£899 million). The transaction is slated to close in the second half of 2024 and is subject to approval from Hibbett’s shareholders and regulatory clearances.

Strategic Expansion and Financial Enhancement

This acquisition marks a pivotal step for JD Sports as it aims to expand its footprint in the North American market, particularly enhancing its presence in the southeastern United States. Hibbett, which is headquartered in Birmingham, Alabama, operates 1,169 stores across 36 states and has been a recognized name in sports fashion retail for over 75 years. The acquisition is strategically aligned with JD Sports’ objectives to strengthen its Complementary Concepts division and bolster its position in the largest sportswear market globally.

Régis Schultz, CEO of JD Sports Fashion Plc, expressed enthusiasm about the acquisition, stating, “This acquisition is in line with our strategic priorities and is a very important transaction for our strategic and financial development.” He highlighted the complementary nature of Hibbett’s footprint and the potential for rolling out the JD fascia across the U.S. more effectively.

Financial Outlook and Synergy Expectations

The transaction is anticipated to be earnings accretive from the first year, excluding potential synergies. JD Sports plans to fund the acquisition and refinance Hibbett’s existing debt through a mix of existing U.S. cash resources totaling $300 million and a $1,000 million extension of its existing bank facilities. The deal is expected to strengthen JD Sports’ key brand partner relationships and enhance its financial metrics, with projected annual cost synergies of at least $25 million.

Leadership and Future Growth

Hibbett’s current leadership, including President and CEO Michael E. Longo and Executive Vice President of Merchandising Jared S. Briskin, will continue in their roles post-acquisition. Longo has been with Hibbett since its acquisition of City Gear LLC in 2019, where he served as CEO since 2006. Briskin joined the company in 1998 and was appointed Executive Vice President of Merchandising in 2021.

Completion and Advisory

The acquisition, categorized as a Class 2 transaction under UK Listing Rules, is expected to complete in the latter half of 2024. It is contingent upon customary conditions, including approval from Hibbett stockholders and clearance under the U.S. Hart-Scott-Rodino Antitrust Improvements Act. Financial advisors Baird and Rothschild & Co, along with legal advisor Freshfields Bruckhaus Deringer LLP, are supporting JD Sports. Hibbett is advised by Solomon Partners Securities, LLC, and Bass, Berry & Sims PLC.