As part of its initiative to acquire Family Dollar Stores, Dollar Tree has entered into an agreement with Sycamore Partners, a private equity firm, to sell 330 stores. The sale, constituted of Family Dollar banner stores, is contingent on completion of Dollar Tree’s pending acquisition of its former competitor.
The 330 stores represent $45.5 million of operating income for Family Dollar, Dollar Tree and Sycamore partners stated in a joint announcement about the deal. Sycamore Partners intends to operate the stores under the Dollar Express banner, the companies noted.
“The divestiture presents Sycamore Partners with a unique opportunity to continue their track record of meaningful growth and successful retail investments,” said Bob Sasser, Dollar Tree’s CEO.
Peter Morrow, Sycamore Partners managing director, said, “We look forward to drawing on our extensive experience with similar corporate carve-outs in acquiring and operating this attractive portfolio of 330 stores, which have an annual run-rate of approximately $500 million in sales. We have a proven track record of retail success and an experienced leadership team. We are eager to better serve the needs of customers in these markets by providing an improved shopping experience.”
Dollar Tree and Sycamore pointed out that the store divestiture addressed United States Federal Trade Commission concerns about the Family Dollar acquisition. The divestiture and the pending acquisition remain subject to review by the FTC, the companies noted, adding that that Dollar Tree continues to work with the FTC to gain final clearance for the merger. The retailer plans to complete the merger in early July 2015, given final commission clearance.