Dollar Tree, Inc. (DLTR, Financial) has entered into a definitive agreement to sell its subsidiary, Family Dollar Stores, LLC, to 1959 Holdings, LLC for a cash purchase price of $1,007,500,000. This transaction, subject to customary closing conditions, marks a significant strategic move for Dollar Tree as it focuses on its core operations.
The agreement, signed on March 25, 2025, outlines the sale of all issued and outstanding membership interests of Family Dollar Stores, LLC. The purchase price is subject to adjustments based on cash, indebtedness, transaction expenses, and net working capital at the time of closing. The closing is anticipated to occur in the second quarter of 2025, following the satisfaction of regulatory approvals and other conditions.
Key conditions for the closing include the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, absence of legal injunctions, and compliance with representations and warranties by both parties. Notably, the transaction is not contingent upon financing or shareholder approval from Dollar Tree.
Both parties have committed to using reasonable efforts to secure necessary governmental and regulatory approvals. Additionally, Dollar Tree has agreed to certain operational covenants until the transaction's completion, including maintaining business operations in the ordinary course.
The agreement includes customary termination rights, with a potential termination fee of $55,412,500 payable by the buyer under specific circumstances. Ancillary agreements, such as a transition services agreement, will be executed at closing to facilitate a smooth transition.
This divestiture aligns with Dollar Tree's strategic objectives, allowing the company to streamline its operations and focus on its primary business segments. Investors and stakeholders will be closely monitoring the transaction's progress and its impact on Dollar Tree's financial performance.
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