JD Sports consolidates European trading platform with ISRG buyout

JD Sports has confirmed today that it will buy the remaining 49.8% stake in Iberian Sports Retail Group, SL (ISRG) for a total cash consideration of €500.1m, which will be funded from the group’s existing available cash resources.

The Bury-based sports and athleisure retailer announced in May that it was in negotiations with Balaiko Firaja Invest, SL and Sonae Holdings, SA, the minority parties who collectively hold the remaining 49.98% shares in ISRG.

It said, at the time, there were three potential scenarios. First, JD acquires the remaining holding in ISRG; secondly, the minority parties acquire JD’s 50.02% holding in ISRG and the group simultaneously acquires the minority parties interest in JD across Iberia; and thirdly, no change to the existing shareholdings.

JD’s chief executive, Régis Schultz, confirmed today that the group has opted for the first option.

ISRG currently operates more than 460 stores across Europe, including JD in Iberia, Sprinter in Spain, Sport Zone in Portugal and Aktiesport and Perry Sport in the Netherlands. ISRG also has a 98% holding in the Deporvillage online business and a 50.1% holding in the Bodytone fitness equipment business.

The latest ISRG figures, up to the year ended January 31, 2023, show it achieved consolidated revenues of €1.0378bn, up from €1.2393bn the previous year, and made a consolidated pre-tax profit of €73.2m, compared with €96.6m in 2022. It also had consolidated gross assets of €659.4m, down from €767.7m the year before.

JD says it believes there are opportunities to continue to develop Sprinter and Sport Zone and that the ISRG team in Iberia also have an important part to play in the further development of the JD fascia in Iberia and beyond.

The group says it currently expects the transaction to complete in October 2023.

Mr Schultz said: “At our capital markets event earlier in the year, we emphasised the benefit of having strong complementary concepts to support our ‘JD first’ global growth strategy.

“ISRG is a highly successful business and one of the leading players in sports retail in Iberia. By bringing the two businesses closer together, there is significant potential for accelerating growth.

“We sincerely thank the minority shareholders, Balaiko and Sonae, for their important contributions to the business during our time as partners.”