Dollar Tree Sells Family Dollar Business for $1B
Dollar Tree Inc. has sold its Family Dollar banner for $1 billion. The discount giant reached an agreement under which Brigade Capital Management LP and Macellum Capital Management LLC will partner to acquire the business segment. The deal is expected to close in approximately 90 days, with the Family Dollar business headquarters remaining in Chesapeake, Va.
In the first half of fiscal year 2024, Dollar Tree revealed the closure of 600 Family Dollar stores. Shortly thereafter, the company undertook a formal review of strategic alternatives for its banner. The Dollar Tree leadership team and board of directors has now determined that a sale of Family Dollar to Brigade and Macellum best unlocks value for Dollar Tree shareholders and positions Family Dollar for future success.
“This is a major milestone in our multi-year transformation journey to help us fully achieve our potential,” said Mike Creedon, CEO of Dollar Tree Inc. “We will continue to grow and optimize our Dollar Tree business to maximize value for Dollar Tree associates, customers and shareholders with an enhanced focus on compelling initiatives, including our expanded assortment, significant planned new store openings across the United States, and transactions that advance our growth strategy.”
Creedon continued: “Under the experienced, dynamic leadership of Family Dollar President Jason Nordin, and with the financial support of Brigade and Macellum, Family Dollar will be well positioned for growth as a private company. With the support of a dedicated team, Family Dollar will be able to strengthen its commitment to providing affordable and essential goods to customers so they can do more with less.”
Matt Perkal, partner at New York-based global asset management firm Brigade, said: “Since 1959, Family Dollar has served its customers by offering convenient, high-quality products at a great value, and the business is a pillar in communities across the United States. We look forward to continuing and enhancing Family Dollar as its own enterprise, which we are confident will drive greater success for the business and value for all of Family Dollar’s stakeholders, including employees, customers and communities.”
“This transaction presented a unique opportunity to play a key role in reinvigorating an iconic business. Throughout this process, we have met an exceptional group of executives that are dedicated to the company and its customers. We look forward to executing the strategic plan we have developed together,” added Jonathan Duskin, CEO and partner of New York-based investment firm Macellum.
Duncan MacNaughton, former CEO and president of Family Dollar and former chief merchandising officer at Walmart, will be joining the company as chairman.
“I am excited to collaborate with the Family Dollar team and our incredibly capable and supportive new investors to drive the business forward in this next chapter of its evolution,” said MacNaughton. “Family Dollar has a tremendous potential to grow and succeed as an independent company, and I am honored to be able to play a role in helping the company fully realize that opportunity.”
J.P. Morgan Securities LLC is serving as financial advisor and Davis Polk & Wardwell LLP is serving as legal advisor to Dollar Tree.
Jefferies LLC is serving as lead financial advisor to Brigade and Macellum, and RBC Capital Markets is also serving as financial advisor in connection with the acquisition of Family Dollar. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor in connection with the transaction. Wells Fargo, RBC Capital Markets and WhiteHawk Capital Partners are providing financing for the transaction.
Chesapeake, Va.-based Dollar Tree operated 16,500 stores across 48 states and five Canadian provinces as of Feb. 1. Stores include the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada. The company is No. 20 on The PG 100, PG’s 2024 list of the top food and consumables retailers in North America.
