Dollar Tree announced on Monday the completion of the sale of its Family Dollar business.
The Chesapeake-based company sold the business segment to Brigade and Macellum, two capital management companies, for $1 billion in cash.
The net proceeds are estimated to total approximately $800 million. The company anticipates the economic impact of tax benefits from losses on the sale to be approximately $375 million, according to a news release.
Dollar Tree CEO Mike Creedon said in the release that the transaction marks a defining moment.
“With a singular focus on our core business, we are doubling down on what we do best — delivering value, convenience, and discovery to our customers every day,” he said. “Now more than ever before, we are poised to accelerate our growth, innovate faster, and unlock our full potential as a category leader in value retail.”
Founded almost 40 years ago, Dollar Tree — now a standalone company with 9,000 stores throughout the U.S. and Canada — plans to focus on growth through expanded assortment and new stores to attract customers.
Family Dollar, with more than 7,500 locations nationwide, will remain headquartered in Chesapeake.
Under a new leadership team backed by investors in a private company, Family Dollar plans to strengthen its organization and brand.
“This is a defining moment for Family Dollar — a chance to return to our roots, refocus on our unique strengths, and build a future tailored to the communities we proudly serve,” said Duncan MacNaughton, Family Dollar chairman and CEO.
Dollar Tree had acquired Family Dollar for $9 billion in 2015 after a bidding war with rival Dollar General. While the acquisition was meant to grow the company’s footprint and scale to fend off competitors, analysts said the chain struggled to integrate the retail brands. The Family Dollar brand took a hit in recent years and the chain closed hundreds of stores.
The Associated Press contributed to this story.
Sandra J. Pennecke, 757-652-5836, [email protected]
Originally Published:
