Business
Acquisition of Shoe Palace in United States
Acquisition of Shoe Palace in United States.
About this update from Jd Sports Fashion Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 6250I\n JD Sports Fashion Plc\n 15 December 2020\n \n \n \n 15 December 2020\n \n \n \n JD Sports Fashion Plc\n \n \n \n \n Acquisition of Shoe Palace in United States\n \n \n JD Sports Fashion Plc ('JD' or the 'Group'), one of the world's leading retailers of sports, fashion and outdoor brands, announces that on 14 December 2020, its existing wholly-owned intermediate holding company in the United States, Genesis Holdings Inc ('Genesis'), acquired 100% of both the issued shares in the Shoe Palace Corporation and the members' interests in Nice Kicks LLC (together 'Shoe Palace').\n \n Based in San Jose, California, Shoe Palace was established in 1993 by the Mersho family and currently has 167 stores, the vast majority of which trade under the Shoe Palace banner. More than half of the stores are located in California, although there is also an established retail presence in Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii, with the store network supported by a developing ecommerce platform. In the year to 31 December 2019, Shoe Palace generated revenues of $435 million. Shoe Palace is operated by four brothers from the Mersho family (together the 'Mersho Brothers') who head up the various operating functions across the business.\n \n Total cash consideration for the acquisition of Shoe Palace, subject to customary cash / debt and working capital adjustments, is $325 million, of which $100 million has been deferred and will be paid on various dates over the next 12 months. This cash consideration is being funded from the Group's cash resources and existing bank facilities. In addition, the Mersho Brothers have also been issued with equity in Genesis such that they will own 20% of the enlarged group in the United States. The initial fair value of this equity consideration is approximately $356 million. Additionally, a number of put and call options, to enable future exit opportunities for the Mersho Brothers have also been agreed, which commence after the end of the financial year to 1 February 2025.[1]\n \n The acquisition of Shoe Palace complements the Group's ongoing positive developments from the existing Finish Line and JD fascias in the United States, which includes the recent opening of JD's flagship store in Times Square, New York. In particul...