A British sporting goods giant has entered into a deal that will give it a major presence in the U.S. market.
JD Sports Fashion PLC will acquire Finish Line in a deal valued at $558 million. The news comes a few months after rumors circulated that the U.S. retailer was in discussions to sell itself to Sports Direct International Plc, a U.K.-based rival of JD Sports.
JD Sports is the largest sportswear retailer in the U.K. It has expanded overseas in recent years, to such markets as France, Spain, and South Korea.
“The acquisition represents an excellent opportunity for JD to establish its market leading multi-brand proposition in the world’s largest athleisure market,” said Peter Cowgill, executive chairman, JD Sports. “It immediately offers a major presence in the U.S., a clear next step to further increase our global scale. Finish Line has many similarities to JD with a strong bricks-and-mortar offering complemented by an advanced and well-invested digital platform.”
Finish Line has approximately 556 stores, mostly in malls, and 375 in-store shops inside Macy’s department stores. The retailer has been struggling amid sluggish mall traffic. Same-store sales in its fourth quarter fell 7.9%.
Finish Line management will continue to be involved in the business after the deal closes.
“Finish Line has long admired JD and their commitment to serve customers with premium brands through a unique and innovative retail experience,” said Sam Sato, CEO of Finish Line. “We are thrilled to partner with them and look forward to realizing the impact we will have on the marketplace together.”
Under terms of the deal, JD will pay $13.50 in cash for each Finish Line share outstanding, represents a 28% premium to Finish Line’s closing price on Friday. The agreement, subject to Finish Line and JD shareholder approval, is expected to close no earlier than June 2018.
