Dollar Tree selling Family Dollar for $1 billion to private-equity investors
Dollar Tree Inc. has entered into a deal to sell its struggling Family Dollar business, but for a fraction of what it paid for the chain some 10 year ago.
The discounter has reached an agreement under which private-equity investors Brigade Capital Management and Macellum Capital Management will partner to acquire Family Dollar for $1 billion. The business will remain headquartered in Chesapeake, Va. The deal is expected to close in approximately 90 days.
In March 2024, Dollar Tree said it would close 600 Family Dollar stores in the first half of fiscal 2024, with another 350 locations slated to close over the next several years. Several months later, the retailer said it was undertaking a review of strategic alternatives for the banner, which it acquired in 2015 for about $8.5 billion following a drawn-out battle with rival Dollar General Corp. Family Dollar currently has roughly 8,000 US stores, catering primarily to low-income customers.
“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.”
Dollar Tree has faced challenges in integrating Family Dollar, which has struggled under increased competition from the likes of Walmart and Dollar General, into its business. At the end of 2024, the company appointed Jason Nordin as president of Family Dollar Stores, and said he would play a key role in the banner’s review of strategic alternatives. Nordin joined the company in October 2023 as chief of stores for Dollar Tree. Prior to that, he served as COO of Pilot Company.
“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 said. “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.”
Jonathan Duskin, CEO and partner of Macellum, said the transaction presented 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,” he said. “We look forward to executing the strategic plan we have developed together.”
Duncan MacNaughton, former CEO and president of Family Dollar and former chief merchandising officer at Walmart, will be joining the company 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,” said MacNaughton. “Family Dollar has a 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.”
Advisors
J.P. Morgan Securities LLC is serving as financial advisor and Davis Polk & Wardwell LLP is serving as legal advisor to Dollar Tree.
Jefferies LLC is serving as lead financial advisor to Brigade and Macellum, and RBC Capital Markets is also serving as financial advisor in connection with the acquisition of Family Dollar.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor in connection with the transaction. Wells Fargo, RBC Capital Markets, and WhiteHawk Capital Partners are providing financing for the transaction.
Dollar Tree operated 16,500 stores across 48 states and five Canadian provinces as of Feb. 1, 2025. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.
