Q: What do you think of its acquisition of The Reject Shop in Australia.?
5i Research Answer:
It is pretty small, at $259M, on DOL's $42B market cap, but we think it is interesting nonetheless. It doubles DOL's presence in the country. Reject has had some executive turnover, but is overall very similar to DOL. It adds $852M in sales, and same store growth was 2.6% last year. Major shareholders approve the deal and considering the high premium we would expect it to close. DOL has coveted Reject for at least a couple of years. Longer term, having an Australian base could make way for an interesting stepping stone into a potential Asia expansion for the company.