Discount retailer Dollar Tree, Inc. (DLTR) said Monday that it has signed a definitive agreement to purchase the assets of Vancouver, British Columbia-based Dollar Giant Store (B.C.) Ltd., for about C$52 million in cash, the first expansion of its retail operations outside the United States.
Under the terms of the deal, Dollar Tree will acquire 85 Dollar Giant stores including substantially all assets, inventory, leasehold rights and intellectual property. The transaction is expected to be completed by mid-November, subject to customary closing conditions.
Bob Sasser, president and chief executive officer of Dollar Tree said that the acquisition will help to further leverage the company's resources and infrastructure to offer more value to more customers and will provide with an outstanding platform for significant, profitable growth in the Canadian market.
Dollar Tree added that the acquisition of Dollar Giant is part of its strategy to invest for continued profitable growth by expanding its store base, improving store productivity and developing new retail formats.
The Chesapeake, Virginia-based Dollar Tree operates discount variety stores selling everything for $1 or less. The company operates 3,961 stores in 48 U.S. states as of October 2, 2010.
In August, while reporting its second-quarter results, Dollar Tree had raised its fiscal 2010 adjusted earnings forecast to a range of $2.97 to $3.09 per share from the prior guidance of $2.86 to $3.00 per share and estimated annual sales to be between $5.77 billion and $5.86 billion, up from prior estimate of $5.67 billion to $5.80 billion.
For the second quarter, the company reported a 37% year-over-year increase in profit, boosted by higher operating margins and sales growth amid better store traffic.
Dollar Giant stores offer a wide assortment of quality general merchandise, contemporary seasonal goods and everyday consumables, for C$1.25 or less. The stores average 9,000 gross square feet and operate in British Columbia, Ontario, Alberta and Saskatchewan.
DLTR closed Friday's regular trading at $49.09 on the Nasdaq.
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