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JD Sports to acquire specialist sports retailer in Spain for €140.4mln

JD Sports Fashion PLC (LON:JD.) announced that its 50.02%-owned holding company in Spain is to acquire 80% of the issued shares in Deporvillage for €140.4mln.

Based in Manresa in Catalonia, Deporvillage is an online-only retailer focussing on the sale of specialist sports equipment mostly for cycling, running and outdoor.

READ: JD Sports to sell a subsidiary to another subsidiary

After launching initially in Spain in 2010, Deporvillage has expanded internationally and has websites in Italy, France, Portugal, Germany and the UK.

The cash consideration comes from the FTSE 100 group’s cash resources and existing bank facilities, while €40.4mln has been deferred and will be paid based on performance in the remainder of 2021.

In the year to 31 December 2020, it made revenues of €117.8mln and profit before tax of €7.7mln. The gross assets at year-end were €51.1mln.

Founders Xavier Pladellorens and Ángel Corcuera, who are minority shareholders, will retain a 20% holding in the business and will keep their roles as chief executive and chief purchasing officer respectively.

The ‘athleisure’ retailer said the acquisition needs to receive antitrust clearance before completing.

It added that the acquisition will boost its “authenticity” in key sports categories, significantly increase its digital capabilities in the sports equipment market and complement the Sprinter and Sport Zone segments.

“Deporvillage has a strong consumer-centric approach and is the market leader in its categories in Spain with significant potential for further international development,” said chairman Peter Cowgill.

Analysts at house broker Peel Hunt noted that this is not a “JD-lookalike” as over 50% of sales are in cycling, with the balance in areas such as trekking, triathlon and camping.

“The multiple isn’t lowly (it was a dip for the line with private equity) but it is the going rate for a profitable pure-play with strong growth credentials,” the broker said.

“We do not doubt that JD has other deals lined up for the next six months. Back in the day job, we expect JD to continue trading well.”

Shares dipped 1% to 946.2p on Monday morning.

–Adds analyst comment, shares–

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