Private-Equity Firm Sycamore Partners to Acquire Staples for $6.9 Billion

Office-supplies chain Staples reported yesterday that Sycamore Partners, a private-equity firm, will acquire Staples for approximately $6.9 billion.

Under the agreement, all Staples’ stockholders will receive $10.25 per share in cash for each share of common stock they own.

Staples’ board of directors has unanimously approved the agreement and recommends that all Staples stockholders vote in favor of the transaction.

Robert Sulentic, Staples Chairman of the Board, said, “Today’s announcement is the result of a comprehensive process in which our Board, with the assistance of a transaction committee comprised of independent directors, and outside financial advisors, explored and considered various alternatives to enhance value for our stockholders. Staples’ Board believes that this process has led to a transaction which is in the best interests of our stockholders, as well as Staples and its employees.”

The transaction is subject to customary closing conditions, including the receipt of regulatory and stockholder approval, and is expected to close by December, 2017. The closing is not subject to a financing condition.

“With an iconic brand, a winning strategy, and dedicated and passionate associates who are deeply focused on the customer, Staples is truly an outstanding enterprise,” commented Stefan Kaluzny, managing director of Sycamore Partners. “We have tremendous confidence in CEO Shira Goodman and great respect for the Staples management team and are excited about this opportunity to partner with them to accelerate long-term profitability.”

“The Sycamore Partners’ team shares Staples’ entrepreneurial spirit and long-term vision,” said Shira Goodman, Chief Executive Officer and President, Staples, Inc. “This transaction will enable us to drive greater value for our customers and immense opportunity for our business.”

Staples had tried to merge with Office Depot, but the merger was blocked by a federal judge, and the companies abandoned their effort last year.

Staples has acknowledged the challenges of online competition that it faces, noting in its annual report: “We also compete with online retailers such as Amazon.com, mass merchants such as Walmart and Target, warehouse clubs such as Costco, computer and electronics retail stores such as Best Buy,” the company said. “We are focused on maximizing profitability and reducing risk in our underperforming North American retail and international businesses,” the company said in its annual report, noting that it planned to close about 70 stores in North America this year.

According to The New York Times, “Staples’s board and management decided to sell the company after shareholders had essentially lost faith in the business. Shares of the company were trading near $7 earlier this year, having fallen sharply from about $18 a share just two and a half years ago.”

More Resources

• March 2017: Staples to Close 70 Stores in U.S. and Canada as it Focuses on ‘Business Services’
• March 2017: Staples Sells European Business to Cerberus Capital
• November 2016: Staples’ New Owner Hilco to Shutter Staples’ Stores in U.K.
• July 2016: Taylor Completes Acquisition of Staples Print Solutions; Staples to Shutter More Stores in North America
• July 2016: Staples Reportedly Considering Leaving U.K. after Failed Office Depot Merger
• June 2016: Staples Launches ‘Staples Rush’ Same-Day Delivery Service
• May 2016: Staples, Office Depot Call Off Merger in Wake of U.S. District Court Ruling
• December 2015: FTC Sues to Block Staples’ Acquisition of Office Depot
• December 2014: Staples Now Offering HP’s Instant Ink Ink-Cartridge Subscription Program
• March 2014: Staples to Shutter 255 Office-Supply Stores Across North America