UNITED KINGOM — JD Sports Fashion Plc (“JD” or the “Company”), the leading European retailer of sports, fashion and outdoor brands, announced that it has entered into a conditional acquisition agreement to acquire 100% of the issued share capital of The Finish Line, Inc. (“Finish Line”) at a price of $13.50 per Finish Line share in cash, valuing Finish Line’s total equity at approximately $558 million (approximately £396 million) (the “Acquisition”).
“We are extremely excited to be joining up with Finish Line, a well-established US operator,” said Peter Cowgill, Executive Chairman of JD. “The Acquisition represents an excellent opportunity for JD to establish its market leading multi-brand proposition in the world’s largest athleisure market. It immediately offers a major presence in the US, 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. We are looking forward to working with Finish Line’s experienced management team to bring best in class retail theatre to the US. Our combined extensive knowledge of the retail market and our product and marketing relationships with global brand partners will benefit our customers, in turn supporting the continued future growth of JD.”
Finish Line is one of the largest retailers of premium multi-branded athletic footwear, apparel and accessories in the United States (“US”), the largest sportswear market in the world. Finish Line trades from 556 Finish Line branded retail stores across 44 US states and Puerto Rico in addition to a well-established multi-channel offering. Finish Line is also the exclusive retailer of athletic shoes, both in-store and online for Macy’s, one of the US’ premier retailers, operating 375 branded and 188 unbranded concessions within Macy’s stores.
“The Special Committee appointed by the Finish Line board recommended and the board voted unanimously to approve entering into this merger agreement,”said Bill Carmichael, Chairman of the Special Committee and Lead Director of the Finish Line Board of Directors.”With JD, Finish Line achieves immediate value for its shareholders and moves into a stronger position to compete as part of a global enterprise that leads in our industry.”
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. On completion of the Acquisition, the Company will focus on bringing JD’s highly differentiated multi-channel retail proposition to the US market.
“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, Chief Executive Officer of Finish Line. “We are thrilled to partner with them and look forward to realizing the impact we will have on the marketplace together.”
· Finish Line is listed on the NASDAQ stock exchange with a market capitalisation of approximately $425 million (approximately £301 million) as at 23 March 2018, being the last practicable date prior to the publication of this announcement
· For Finish Line’s year ended 25 February 2017, Finish Line had revenues of $1.84 billion (£1.30 billion) and a profit before tax of $54 million (£38 million). For Finish Line’s year ended 3 March 2018, Finish Line had revenues of $1.84 billion (£1.30 billion)
· Finish Line employs around 3,700 full time and around 9,300 part-time staff
· Finish Line’s Executive team will continue their involvement with the business following the Acquisition
· The Acquisition is to be funded by way of a new revolving credit facility for JD and a new asset backed lending facility secured against Finish Line’s inventory and receivables
· The Acquisition is expected to make a small incremental positive contribution to the Company’s results and earnings per share in the period to 2 February 2019
· The Acquisition is subject to the approval of both JD and Finish Line shareholders
· Completion is expected to take place no earlier than June 2018