LONDON, UK: JD Sports Fashion has entered into exclusive negotiations with the owners of Groupe Courir S.A.S with regards to the potential future acquisition of 100% of the issued share capital of Groupe Courir for an enterprise value of €520 million.
The business is currently majority owned by Equistone Partners Europe which acquired Courir in 2018 following the carve out from Groupe Go Sport.
In accordance with French law, Courir management will now commence consultation processes with its relevant employee representative bodies prior to being able to enter into a binding sale and purchase agreement for the Transaction.
The Transaction will need to be notified to the European Commission in accordance with European Union Law. Completion of the acquisition is therefore conditional on receipt of merger control approval. Given the potential timings associated with the consultation and competition assessment processes, completion of the Transaction would not be expected before the second half of 2023.
After deducting net debt of €195 million, the amount payable at completion, subject to certain adjustments, would be €325 million which would be funded through available cash resources. The net debt of €195 million in Courir principally constitutes existing funding lines of approximately €210 million which would be refinanced at completion.
Based in France, Groupe Courir is a leading player in the European sports footwear and apparel sector with 313 stores bannered as Courir across six countries in Europe.
In addition, there are a further 36 stores which trade under franchise agreements as Courir in North West Africa, Middle East and French overseas territories. Further, there are two stores which trade as Naked in Denmark which is an elevated female sneaker business.
JD Sports Fashion Plc announced its intention to take its first acquisitive steps in fulfilling the growth ambitions, as set out at the Capital Markets Event in February this year. Additionally, the Group is reviewing options to simplify the shareholdings in a number of its subsidiary businesses across Europe with a view to accelerating the development opportunities that exist for the JD fascia.
Régis Schultz, CEO of JD, said: “We said at our recent Capital Markets Event that this was the start of a new, distinct chapter in the growth story of JD. The exciting developments that we are announcing today reflect the strategic priorities that we highlighted on the day.
“We are delighted to announce the proposed acquisition of Courir, a business that is held in high regard in the European sportswear community. We look forward to concluding the contemplated transaction, welcoming the Groupe Courir team to the Group and then working with management to fulfil Courir’s global potential. Investing in quality complementary concepts whilst furthering the growth of JD itself is a key strategic pillar for the Group and one which we will continue to pursue in the future.
“Securing greater control over the long-term development of JD and prioritising the development of the JD brand is a key pillar in our growth strategy in Europe. It will give us simpler decision making which will allow us to use our assets with more efficiency. At the same time, it will considerably simplify the group operations. We thank our partners for their contribution to the development of JD across Europe and for their constructive engagement.”
For the 52 week period ended 31 December 2022, Courir had consolidated revenues of €609.8 million which included €100.3 million from the combination of the sale of product on a commission basis to the affiliates and other commission income from franchisees, a profit before interest and tax of €47.4 million and gross assets of €678.4 million.