Dollar Tree is selling its Family Dollar business to private equity firms for over $1 billion, a move aimed at revitalizing the struggling brand as it transitions to private ownership.

Target Information

Dollar Tree is divesting its Family Dollar business, which it acquired a decade ago for approximately $8.81 billion. The acquisition involved incorporating Family Dollar's extensive network of locations into Dollar Tree's operational framework. However, following years of challenges, the decision has been made to sell Family Dollar to private equity firms Brigade Capital Management and Macellum Capital Management for just over $1 billion. This significant reduction in value underscores the struggles faced by Family Dollar under Dollar Tree's ownership.

This transaction is anticipated to finalize in the upcoming quarter, transforming Family Dollar into a private entity, thereby distancing it from its parent company, Dollar Tree. CEO Mike Creedon expressed optimism regarding this transition, emphasizing the expertise and resources that the new owners bring, which are expected to enable Family Dollar to capitalize on growth opportunities.

Industry Overview

The discount retail sector in the United States, particularly for chains like Family Dollar, has been undergoing substantial pressure due to inflation and an increasingly competitive landscape. Family Dollar primarily operates i