Family Dollar Sold to Private Equity Firms

Dollar Tree Inc. (Chesapeake, Va.) said it has reached an agreement to sell its Family Dollar unit for $1 billion to two private equity firms: Brigade Capital Management LP and Macellum Capital Management LLC. That’s a steep discount from the $9 billion Dollar Tree paid for the business in 2015.

The two companies struggled over the years to make the combination work. Then, last year, Dollar Tree said it planned to close 1000 Family Dollar stores and undertake a strategic review of the acquisition that led to this latest sale.

“This is a major milestone in our multi-year transformation journey to help us fully achieve our potential,” Dollar Tree CEO Mike Creedon said in a news release. “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.”

Said Brigade Partner Matt Perkal: “We look forward to continuing and enhancing Family Dollar as its own enterprise, which we are confident will drive greater success for the business and value for all of Family Dollar’s stakeholders, including employees, customers and communities.”

The proposed sale is subject to regulatory approval and is expected to close during this year’s second quarter.

Dollar Tree operates just over 8700 stores in the U.S. while Family Dollar has about 7600 such outlets, according to the latest information from data gatherer ScrapeHero.