JD Sports Fashion PLC on Tuesday said it has signed a binding agreement to buy US sports fashion retailer Hibbett Inc for just over $1 billion.

The Manchester, England-based sportswear retailer said it will pay $87.50 per Hibbett share in cash. Hibbett is Nasdaq-listed, and its shares closed on Monday in New York at $72.49, up 1.9% on the day, for a $855.14 million market capitalisation.

JD Sports shares were up 5.5% to 125.00 pence early Tuesday in London, giving it a market cap of £6.50 billion.

JD Sports said its offer implies an equity value of $1.08 billion for Hibbett and an enterprise value, including debt, of $1.11 billion. It will fund the acquisition and refinance Hibbett’s debt with $300 million in existing US cash resources and a $1.00 billion extension of its bank facilities.

Birmingham, Alabama-based Hibbett operates 1,169 sports fashion stores across 36 US states, mainly under the Hibbett and City Gear brands. In the financial year that ended February 3, Hibbett recorded $131.6 million in pretax profit on $1.73 billion in net sales.

JD Sports expects to be able to achieve at least $25 million in annual cost synergies from the combination with Hibbett, which will continue to be run by Chief Executive Officer Michael Longo and Executive Vice President of Merchandising Jared Briskin. The combined US business will have £4.7 billion in revenue, representing 40% of JD’s total, up from 32% now.

‘Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the southeastern US, where we currently have a limited presence. It will also provide a stronger platform for the rollout of the JD fascia in the US,’ commented JD Sports CEO Regis Schultz.

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