Sold! Staples Going Private In $7B Buyout

Sold! Staples Going Private In $7B Buyout

Staples’ sales have fallen over 6% in the last five years to $18.2bn and it has reportedly cut the number of stores it runs to around 1,600 from almost 2,300 in 2012, according to official data.

“The opportunity for retailers to go private is to give them the space they need to reinvent their brands, redo their store formats, and emerge a much stronger retailer”, Steve Barr, a partner and the US Retail and Consumer Sector leader at PricewaterhouseCoopers, previously told Retail Dive. Its previous investments include regional department store operator Belk Inc., discount general merchandise retailer Dollar Express and mall and web-based specialty retailer Hot Topic. Last month, it overhauled its marketing to pivot away from its roots – selling low-cost office supplies at big stores.

Staples board chairman Robert Sulentic 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”.

Image: Inside a Staples’ store.

As of January 2017, Staples operated 1,255 stores in the United States and 304 stores in Canada, along with dozens of stores overseas.

The Staples acquisition is slated to close by the end of 2017.

UBS Investment Bank, BofA Merrill Lynch, Deutsche Bank, Credit Suisse, Royal Bank of Canada, Jefferies, Wells Fargo Bank, National Association and Fifth Third Bank are providing debt financing for the deal.

In early April, just before The Wall Street Journal reported that Staples was exploring a sale, the shares were trading at around $8.66.

The plan calls for Staples to be divided into three separately financed entities, according to people familiar with the matter: US retail; Canadian retail; and corporate-supply businesses. The rest will be generated by delivery and online sales. Sycamore said it has “tremendous confidence” in chief executive Shira Goodman and “great respect” for the Staples management team.