JD Sports has bought Sheffield-based retailer Go Outdoors for £112.3m from its private equity owners.
JD Sports is buying the 58-store tents to cycles retailer from YFM Equity Partners and 3i Group. YFM, which has offices in Sheffield and Leeds, said it will achieve a 40 times return on its sale of Go Outdoors.
JD Sports said Go Outdoors will sit alongside its stable of outdoor brands, which include Blacks, Millets and Ultimate Outdoors.
As a result of the deal, Go Outdoors founders Paul Caplan and John Graham will leave the business.
JD Sports chief executive Peter Cowgill said: “Go Outdoors is a great addition to our existing outdoor business. The minimal overlap in store locations and their out-of-town, one-stop retailer approach complements the work we have done on the high street with Blacks and Millets and further strengthens our offering in the Outdoor sector. I am excited by the future prospects this holds for the JD Group.”
YFM said it has made a £23m total return on its investment in Go Outdoors. When YFM originally invested alongside the founders, there was just one store in Sheffield generating £2m in sales, but the firm could see potential for rapid expansion.
David Hall, managing director of YFM said: “This investment has been our best return to date and showcases our experience and expertise in helping businesses develop, change and grow.
“This realisation builds on our long term track record of strong returns from investing in growing business in the UK. And is another example of a success story from a business based in the North of England.”
In the 53 weeks to January 31 2016, Go Outdoors made revenues of £202.2m and pre-tax profit of £4.9m.
John Gallon, corporate partner at DLA Piper who advised JD Sports, said: “Go Outdoors is a great addition to JD’s existing Outdoor business with its out of town, one stop retailer approach complementing the work that JD has done on the high street with Blacks and Millets.”
Rob Baxter, retail partner at KPMG, who advised Go Outdoors, said: “Competition in the UK retail industry is intense, and this pressure is increasingly driving consolidation across the market. The sports and leisure sector has been particularly active in mergers and acquisitions over the past year, driven by very attractive demographic trends and a market in which a large number of retailers and brand owners compete.
“Consumers also appear to be undeterred by what has been a politically tumultuous year. Confidence for the moment remains resilient, supporting retailers’ prospects, and we would expect to see more buyout activity in the coming months.”
Legal advice for the Go Outdoors selling shareholders was provided by Addleshaw Goddard LLP, led by corporate partner Garry Elliott and managing associate James Tatro, and supported by David Parker and James Whittam.
In September, JD Sports notched up record half-year profits and announced plans to set up shop in Australia, as well as vowing to press ahead with European expansion despite the Brexit vote.