JD Sports is to acquire US sportswear retailer Hibbett for $1.1billion (£878million), which chief executive Regis Schultz says will accelerate its growth in the North America.

The British retailer will pay for US-stock market listed retailer using a combination of its existing cash resources and by borrowing approximately £800million from its lenders. JD Sports says that the deal will boost its earnings in its first year and that it can extract “attractive” cost synergies of at least £20million a year from Hibbett.

Schultz said that acquiring Hibbett would also strengthen JD’s relationships with key suppliers like Adidas and Nike in the world’s biggest sportswear market. Hibbett has 1,169 stores in 36 US states and for its latest financial year, it generated an annual profit of £105.7million on revenues of £1.4billion.

He added: “Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the South-east 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. Financially, it accelerates our growth plans within the US.”

Combined, JD’s existing US operations and Hibbett have revenues of £4.7billion from North America. The deal will increase US sales as a percentage of overall group sales from 32 percent to approximately 40 percent.