British sports and fashion retailer JD Sports Fashion Plc (LON:JD) said on Thursday it had agreed to sell New Zealand-based rugby brand owner Canterbury Ltd to JD’s majority shareholder Pentland Group Plc for about GBP22.7m (USD36.1m/EUR28.7m).
As part of the deal, Pentland will pay a nominal price of GBP1.00 for Canterbury’s shares while the balance will cover the business’ debt. The transaction is pending stockholder clearance.
JD has decided to sell this business as it wants to pay more attention to its retail activities, as only a small portion of Canterbury’s products are presently sold via the group’s retail fascias. In addition, most of the business’ revenue and earnings are generated in New Zealand and Australia, where JD has limited operations. The company intends to use the sale proceeds to support further investment in its core retail activities and for working capital purposes.
In a separate transaction, JD will purchase the ONETrueSaxon brand from Pentland for GBP50,000 as part of its strategy to buy intellectual property assets that could support its core retail proposition.
Canterbury was founded in New Zealand in 1904 with the aim of producing rugby jerseys and was acquired by JD in August 2009. For the 52 weeks to 28 January 2012, the business recorded a consolidated operating profit of GBP400,000 and pre-tax loss of GBP1.1m. At the same date it had gross assets of GBP32.6m.