When Vancouver’s Joseph Calvano sold his 86-store Dollar Giant chain for $62 million to Dollar Tree Inc. (Nasdaq:DLTR) one year ago, he predicted there would be more consolidation and lots of growth in the dollar store sector.
That insight proved prescient October 11 when discount retailer 99 Cents Only Stores Inc. (NYSE:NDN) agreed to a deal to be acquired by two investors for about US$1.6 billion.
Affiliates of the investment firm Ares Management LLC and the Canada Pension Plan Investment Board have offered to buy the California-based retailer's stock for $22 per share in cash, 99 Cents Only said in a statement.
When Business in Vancouver investigated the dollar store sector earlier this year, Calvano said that his company had become a Dollar Tree subsidiary and that he was planning to open another 15 stores across Canada by year-end. (See “Dollar store dynasties” – issue 1117; March 22-19.)
“After that, we’ll get aggressive with expansion,” he said.
Calvano founded Dollar Giant in 2001 when he, a brother and a friend each invested $40,000. Calvano was the only one of the three to collect a salary and be active in the business.
But, post-sale, each of the three split $52 million in proceeds after first paying off $10 million in debt.
Glen Korstrom
@GlenKorstrom