The Montreal-based company says it acquired the additional stake in exchange for 6,060,478 Dollarama common shares. The shares were worth a total of about $761.7 million based on Dollarama’s share price of $125.68 on Tuesday.
Dollarama acquires Dollarcity
Dollarama also has acquired an option to buy an additional 9.8% stake in Dollarcity at any time on or before Dec. 31, 2027. Dollarama and the Dollarcity founding stockholders also said that they have agreed on governance terms for the expansion of the business to Mexico.
Dollarama and the Dollarcity founding stockholders will indirectly have an 80.05% and 19.95% interest, respectively, in the Mexican portion of the business. Dollarcity intends to pilot its first store in Mexico in 2026.
“With its strong leadership team, Dollarcity is well-positioned to continue delivering profitable growth, both from its current markets of operation and as we eye our next market of entry,” Dollarama chief executive Neil Rossy said in a statement. “We look forward to preparing for entry in Mexico in the near term, a large and dynamic market with untapped potential in the value retail space, guided by the same careful and disciplined approach as with our successful entries in Colombia in 2017 and in Peru in 2021.”
Dollarama profits for the first quarter
The deal came as Dollarama reported a profit of $215.8 million, or 77 cents per diluted, for its quarter ended April 28, up from a profit of $179.9 million or 63 cents per diluted share a year earlier.
Sales for what was Dollarama’s first quarter totalled $1.4 billion, up from $1.3 billion in the same quarter last year.
Comparable store sales for the quarter rose 5.6%, including an 8.7% increase in the number of transactions and a 2.8% decrease in average transaction size.
“As anticipated, we are seeing a progressive normalization in comparable store sales, with growth primarily driven by persistent higher than historical demand for core consumables and other everyday essentials,” Rossy said. “As Canadian consumers continue to seek out compelling value for their hard-earned money, we will remain focused on executing on our value and convenience promise.”
