Dollar Tree Family Dollar Acquisition: Apollo, Sycamore Battle for Retail Brand
New York, NY - Private equity giants Apollo Global Management (APO) and Sycamore Partners reportedly lead the bidding war for Family Dollar, a discount retail chain owned by Dollar Tree (DLTR).
Investment firm Brigade Capital Management has also signaled interest in acquiring Family Dollar. However, sources emphasize that no deal is imminent, and Dollar Tree retains the option to retain the business.
Dollar Tree, headquartered in Chesapeake, Virginia, has explored strategic options, including a potential sale or spinoff, for Family Dollar since June 2022. This move reflects the challenges Family Dollar has faced since Dollar Tree's 2015 acquisition.
Despite its expansion to 16,590 stores across North America, Family Dollar's performance has lagged behind Walmart and Target amid consumer spending cuts and inflation. In the last 12 months, it generated approximately $13.7 billion in net revenue.
Sycamore Partners, with $10 billion in committed capital, holds a strong track record in retail investments, owning brands like Staples, Loft, and Ann Taylor. It recently pursued a takeover attempt of Walgreens Boots Alliance.
Apollo Global Management, with $70 billion in private equity assets, has investments in Michaels and PetSmart. Brigade Capital Management, known for its credit investing, has attempted to acquire Macy's in the past.
The outcome of this bidding process remains uncertain, with the potential for additional suitors to emerge. Dollar Tree, Apollo, Brigade, and Sycamore declined to comment.