The UK retailer claimed that approximately $100m (£72.8m) of the total cash will be used to repay existing indebtedness of the company.
Based in Baltimore, Maryland, and currently majority owned by BRS & Co. and Goode Capital, DTLR was established in 1982 and is a hyperlocal athletic footwear and apparel streetwear retailer. The company currently operates from 247 stores across 19 states, principally in the north and east of the United States.
Completion of the acquisition is reportedly subject to “customary closing conditions”, including expiration or termination of the applicable waiting period, JD Sports and DTLR anticipate completing this acquisition during Q1 2021. This cash consideration is being funded from the group’s cash resources and existing bank facilities.
The DTLR management spearheaded by Glenn Gaynor and Scott Collins, who will be continuing in their roles as co-CEOs, will also be reinvesting a portion of their proceeds back into DTLR in exchange for a “new minority stake” of approximately 1.4%.
Additionally, out and call options, to enable future exit opportunities for the management team, have also been agreed and become exercisable after a minimum period of three years.
Peter Cowgill, executive chairman of JD Sports, 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 acquisition of DTLR will enhance our presence in the north and east of the United States and will be another important step in the group’s evolution. We look forward to closing the transaction and welcoming the DTLR team to the group.”