Sports Direct International, one of the U.K.’s leading sports retailers, announced Wednesday that it has entered an agreement that will result in the company owning a majority stake of Warrnambool, parent company of Irish department store Heatons, and is looking to purchase its remaining shares as well.
Following the completion of this agreement with minority shareholder, Sandra Minor, Sports Direct will own just over 50 percent of the Irish company.
Sports Direct has also entered a conditional put and call option agreement with Mark Heaton, Hugh Heaton, John O’Neill, Warrnambool and Katipo Limited in relation to the remaining shares in Warrnambool.
Heatons specializes in clothing for men, women and children as well as housewares and has 44 stores in the Republic of Ireland and 10 in Northern Ireland. Twenty-seven out of the 44 stores located in the south have a dedicated Sports World section and each of the 10 stores up north either has a branded section as well or is located next to a Sports Direct outlet. Warrnambool also owns and operates five standalone Sports Direct stores in Northern Ireland.
Sports Direct will pay a total of 47.5 million euros ($53.7 million) for the acquisition, which will be funded from the group’s operating cash flow and existing bank facilities.
For the year which ended April 30, 2015, Warrnambool had a consolidated revenue of 219.3 ($247.6) million euros, gross assets of 158.0 ($178.4) million euros, EBITDA of 17.2 ($19.4) million euros and a profit 10.0 ($11.3) million euros before tax.
“We look forward to accelerating investment into the existing store portfolio and strengthening the Heatons and Sports Direct brands across Ireland,” said Dave Forsey, CEO of Sports Direct.