Acquisition of Shoe Palace in the US for a total consideration of $681m (c.£512m), split $325m cash and 20% equity stake in JD Sports US (ie Genesis Holding, which owns Finish Line/JD Sports US). Shoe Palace is owned by 4 brothers from the Mersho family. $100m of the cash payment is deferred and will be paid out over the next 12 months. The initial $356m equity valuation of the 20% stake in JD US is based on 11x EBITDA. A number of put & call options have been put in place to enable future exit for the Mersho Brothers should they wish. These commence after the end of FY25. Shoe Palace has 167 stores with 90 in California and a presence in Texas, Nevada, Arizona, Florida, Colorado, New Mexico and Hawaii. The average store size is 3,000-3,500 sq.ft with apparel accounting for c.8% of sales and ecommerce c.5% (low vs JD). The company has excellent relationships with all the major international brands and already had double digit EBIT margins pre COVID. Shoe Palace looks highly complementary, both geographically and in terms of community, focusing on the Hispanic/Latino population. Finish Line is more mid/blue collar America. JD can add value via apparel, ecommerce and sales analytics with Shoe Palace helping with JD’s site acquisitions in the US. FY21E/FY22E Group PBT upgraded by c.1%/c.6% to reflect the acquisition. Shoe Palace made sales of $435m & PBT of $52m in the year to the end of December 2019 and has since been hit by store closures in California from COVID in 2020. We assume Shoe Palace adds FY21E/FY22E EBIT of £3m/£30m (post c.£5m of investment/integration costs). Our TP, based on low/mid 20’s CY21E PE, rises to 950p from 800p, reflecting upgrades & greater confidence in recovery. Valuation (CY22E PE 15.5x) does not reflect the strength of JD’s cash generation and future growth prospects. We believe it is well positioned to resume sustainable double-digit growth with upside risk to forecasts.