The announcement comes amid hard times for dollar stores
of ConsumerAffairsDollar Tree has announced it is selling its Family Dollar business segment to a partnership between Brigade Capital Management, LP and Macellum Capital Management, LLC for $1.007 billion, subject to customary closing adjustments.
The sale comes amid hard times for dollar store customers, which means dollar stores themselves face challenges. Dollar General recently announced plans to close up to 100 stores because its customer base is buying less.
The sale announcement comes after Dollar Tree's leadership and board conducted a thorough review of strategic alternatives for the Family Dollar segment, ultimately determining that the sale would best unlock value for shareholders and position Family Dollar for future growth.
Major milestone
"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, in a press release. "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."
Creedon also expressed confidence in Family Dollar's future under the new ownership, saying Family Dollar will be well-positioned for growth as a private company.
The divorce may be slightly awkward since recently opened Family Dollar and Dollar Tree stores often share the same building, putting competitors under one roof.
Brigade Capital Management, a global asset management firm with over $27 billion in assets, and Macellum Capital Management, an investment firm specializing in undervalued companies, are partnering to acquire Family Dollar.
Will close in the second quarter
The transaction is expected to close later in the second quarter of 2025, pending standard closing conditions and regulatory approvals. J.P. Morgan Securities LLC is serving as financial advisor to Dollar Tree, while Jefferies LLC and RBC Capital Markets are advising Brigade and Macellum. Financing for the transaction is being provided by Wells Fargo, RBC Capital Markets, and WhiteHawk Capital Partners.
Dollar Tree is taking a significant loss on the deal, having acquired Family Dollar 10 years ago for around $8 billion.
Posted: 2025-03-26 14:26:41
