Brigade Capital Management LP and Macellum Capital Management LLC have partnered to acquire Dollar Tree’s Family Dollar business segment, Dollar Tree announced on Wednesday. The purchase price for Family Dollar is just over $1 billion.
After a thorough strategic review of potential alternatives for the Family Dollar business segment, the Dollar Tree leadership team and board determined that a sale of Family Dollar to Brigade and Macellum best unlocks value for Dollar Tree shareholders and positions Family Dollar for future success, Dollar Tree said.
Dollar Tree, following a portfolio optimization review, said last March that it would close 1,000 stores in the first half of fiscal 2024. In addition to 600 Family Dollar stores slated to close, the company said it would close about 370 Family Dollar and 30 Dollar Tree stores during the next several years at the end of each store’s current lease term. The company, formed through the merger of Dollar Tree and Family Dollar in 2015, had previously announced plans to undertake a review of its store portfolio.
“Dollar Tree has been on a multi-year journey to help the company fully achieve its potential,” then-chairman and CEO Rick Dreiling said last June.
Chesapeake, Virginia-based Dollar Tree operates 16,500 stores across 48 states and five Canadian provinces. Stores operate under the brands of Dollar Tree, Family Dollar and Dollar Tree Canada. Family Dollar will remain headquartered in Chesapeake.
“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 Inc. “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.”
Under the 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,” said Creedon.
“Family Dollar has a tremendous potential to grow and succeed as an independent company,” said Duncan MacNaughton, former president and COO of the company, who will be joining the company as chairman.
“This transaction presented a unique opportunity to play a key role in reinvigorating an iconic business,” said Jonathan Duskin, CEO and partner of Macellum.
The transaction is anticipated to close later in second-quarter 2025, subject to standard closing conditions and regulatory approvals.
Brigade Capital, New York, is a global asset management firm with more than $27 billion in assets under management, invests across public and private markets using a bottoms-up investment philosophy. Macellum Capital Management, also based in New York, invests in undervalued companies that it believes can appreciate significantly in value through changes in strategy, capital allocation and improvements in operations.
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