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Mike Ashley’s Sports Direct to expand from UK mainland with Irish retail acquisition

Newcastle United owner Mike Ashley is looking to take Sports Direct, his sports retail company, beyond the UK mainland, as the billionaire tycoon is currently pursuing an acquisition deal with an Irish department store chain.

Sports Direct has bought out most of the shareholders in Irish company Warrnambool, in which it already had a 50% stake.

The total cash consideration payable under the Purchase Agreement and the conditional Option Agreement is €47.5m, which will be funded from the firm’s operating cashflow and existing bank facilities.

Warrnambool is the holding company of Heatons, a retail business which specialises in retailing men’s, women’s and children’s clothing together with homewares, with 44 stores in the Republic of Ireland and ten stores in Northern Ireland.

27 of the 44 stores in the Republic of Ireland incorporate a ‘SportsWorld’ section within the store and each of the ten stores in Northern Ireland either incorporates a ‘Sports Direct’ branded section or is located immediately adjacent to a ‘Sports Direct’ outlet which forms part of the premises. In addition, Warrnambool owns and operates a further five standalone ‘Sports Direct’ branded stores in Northern Ireland.

The Purchase Agreement and the conditional Option Agreement are both conditional upon merger clearance from the Irish Competition and Consumer Protection Commission being obtained.

If such merger clearance is obtained, completion of the purchase of shares from Sandra Minor under the Purchase Agreement will take place shortly thereafter. The options are exercisable at various times during a period commencing after such merger clearance has been obtained and ending on 2 July 2017.

For the year ended 30 April 2015, Warrnambool had consolidated revenue of €219.3m, gross assets of €158.0m, EBITDA of €17.2m and profit before tax of €10m.

Dave Forsey, Chief Executive Officer of Sports Direct, commented: “We look forward to accelerating investment into the existing store portfolio and strengthening the Heatons and Sports Direct brands across Ireland”.

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