Dollarama announced Wednesday that it has increased its stake in Latin American retailer Dollarcity to 60.1%, through the acquisition of an additional 10% stake.
The company says it acquired the additional stake in exchange for 6,060,478 common shares of Dollarama.
The shares were worth a total of about $761.7 million based on Dollarama’s stock price of $125.68 as of Tuesday.
Dollarama also acquired an option to purchase an additional 9.89% interest in Dollarcity at any time, but no later than December 31, 2027.
Dollarama and the founding shareholders of Dollarcity also announced that they had agreed on the governance terms for the expansion of the company in Mexico.
Dollarama and the founding shareholders of Dollarcity will indirectly own an 80.05% and 19.95% stake, respectively, in the Mexican portion of the business. Dollarcity intends to pilot its first store in Mexico in 2026.
“The increase in Dollarcity’s long-term target to 1,050 stores by 2031 across the four countries where it currently operates is a testament to the untapped growth potential in these markets and, more broadly, the relevance of our retail model across all regions and demographics,” said Neil Rossy, President and CEO of Dollarama.
The deal came as Dollarama reported earnings of 215.8 million, or 77 cents per share, for its quarter ended April 28, up from earnings of 179.9 million, or 63 cents per share , one year earlier.
Sales for the quarter totaled 1.4 billion, up from 1.3 billion in the same quarter last year.