Dollarama plans expansion to Mexico, posts rise in quarterly earnings

globalnews.ca:

Dollarama Inc. has increased its stake in Latin American retailer Dollarcity to 60.1 per cent with the acquisition of an additional 10 per cent interest.

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 also has acquired an option to buy an additional 9.89 per cent stake in Dollarcity at any time on or before Dec. 31, 2027.

Dollarama and the Dollarcity founding stockholders also announced 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 per cent and 19.95 per cent interest, respectively, in the Mexican portion of the business.

Dollarcity intends to pilot its first store in Mexico in 2026.

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 the quarter totalled $1.4 billion, up from $1.3 billion in the same quarter last year.