Dollar Tree Inc has agreed to sell its Family Dollar business to private-equity firms Brigade Capital Management and Macellum Capital Management in a $1 billion transaction.
The sale, expected to close within 90 days, will see Family Dollar continue to operate from its Chesapeake, Virginia, headquarters.
Family Dollar, acquired by Dollar Tree in 2015 for approximately $8.5 billion following a competitive bid against Dollar General Corp, has struggled in recent years.
In March 2024, Dollar Tree announced plans to shutter 600 Family Dollar locations in the first half of its fiscal year, with an additional 350 stores slated for closure over the coming years.
The company later confirmed a strategic review of the business, culminating in the decision to divest the brand.
“This is a major milestone in our multi-year transformation journey to help us fully achieve our potential,” said Mike Creedon, CEO of Dollar Tree.
“We will continue to grow and optimize our Dollar Tree business to maximize value for Dollar Tree associates, customers, and shareholders with an enhanced focus on compelling initiatives, including our expanded assortment, significant planned new store openings across the United States, and transactions that advance our growth strategy.”
The new owners are positioning Family Dollar for future success under the leadership of its president, Jason Nordin, who joined Dollar Tree as chief of stores in October 2023 before taking on his current role.
The company will also welcome retail veteran Duncan MacNaughton, former CEO and president of Family Dollar and former chief merchandising officer at Walmart, as chairman.
“I am excited to collaborate with the Family Dollar team and our incredibly capable and supportive new investors to drive the business forward in this next chapter of its evolution,” MacNaughton said.
“Family Dollar has tremendous potential to grow and succeed as an independent company, and I am honored to be able to play a role in helping the company fully realize that opportunity.”
Jonathan Duskin, CEO and partner at Macellum, described the acquisition as a ‘unique opportunity to play a key role in reinvigorating an iconic business.’
“Throughout this process, we have met an exceptional group of executives that are dedicated to the company and its customers. We look forward to executing the strategic plan we have developed together,” he said.
Financial and legal advisors involved in the deal include J.P. Morgan Securities LLC and Davis Polk & Wardwell LLP for Dollar Tree, while Jefferies LLC and RBC Capital Markets advised Brigade and Macellum.
“Under the experienced, dynamic leadership of Family Dollar President Jason Nordin, and with the financial support of Brigade and Macellum, Family Dollar will be well positioned for growth as a private company,” Creedon added.
“With the support of a dedicated team, Family Dollar will be able to strengthen its commitment to providing affordable and essential goods to customers so they can do more with less.”
Dollar Tree, which operates 16,500 stores across 48 US states and five Canadian provinces under the Dollar Tree, Family Dollar, and Dollar Tree Canada brands, will now shift focus to strengthening its core business with planned store expansions and strategic initiatives.
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