Discount retailer Dollar Tree on Friday said it has an agreement to sell 330 Family Dollar locations to a New York private equity firm as part of its planned acquisition of Matthews-based Family Dollar.
The sale to Sycamore Partners is contingent on the completion of the Family Dollar acquisition. The deal terms and the locations to be sold weren’t disclosed.
Sycamore Partners said it plans to operate the 330 stores under the name Dollar Express.
The store divestiture had been expected and is one of the final steps needed to allow Chesapeake, Va.-based Dollar Tree to complete its $8.5 billion purchase of one of Charlotte’s iconic homegrown companies. Dollar Tree is set to buy Family Dollar after winning a takeover battle with rival Dollar General that began last year.
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The sale of the 330 stores is designed to address competition concerns raised by the Federal Trade Commission, which is still reviewing the deal. Dollar Tree said it “continues to make progress” with the FTC and intends to close the merger with Family Dollar in early July after receiving the regulator’s approval.
The combined Dollar Tree will have about $20 billion in revenue and more than 13,000 stores, making it the largest U.S. dollar store chain by store count.
Sycamore Partners, which has $3.5 billion in capital under management, specializes in consumer and retail investments. The firm’s portfolio includes companies such as Aeropostale, Coldwater Creek, Hot Topic, Nine West Holdings and Talbots.
“We look forward to drawing on our extensive experience with similar corporate carve-outs in acquiring and operating this attractive portfolio of 330 stores, which have an annual run-rate of approximately $500 million in sales,” said Peter Morrow, a managing director at Sycamore Partners, in a statement.
Dollar Tree has previously said the stores being sold represent about $45.5 million of annual operating income for Family Dollar.
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