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Dollarama plans expansion to Mexico, posts rise in quarterly earnings

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Dollarama Inc. has increased its stake in Latin American retailer Dollarcity to 60.1 per cent with the acquisition of an additional 10 per cent interest.

The Montreal-based company says it acquired the additional stake in exchange for 6,060,478 Dollarama common shares. The shares were worth a total of about $761.7 million based on Dollarama’s share price of $125.68 on Tuesday.

Dollarama also has acquired an option to buy an additional 9.89 per cent stake in Dollarcity at any time on or before Dec. 31, 2027.

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Dollarama and the Dollarcity founding stockholders also announced that they have agreed on governance terms for the expansion of the business to Mexico.

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Dollarama and the Dollarcity founding stockholders will indirectly have an 80.05 per cent and 19.95 per cent interest, respectively, in the Mexican portion of the business.

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Dollarcity intends to pilot its first store in Mexico in 2026.

The deal came as Dollarama reported a profit of $215.8 million or 77 cents per diluted for its quarter ended April 28, up from a profit of $179.9 million or 63 cents per diluted share a year earlier.

Sales for the quarter totalled $1.4 billion, up from $1.3 billion in the same quarter last year.

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