=Staples (SPLS) to be acquired by Sycamore Partners for $10.25 per share

Staples confirms definitive agreement to be acquired by Sycamore Partners for $10.25 per share in cash, or approximately $6.9 bln

  

Framingham, MA-based Staples Inc. said on Wednesday that it entered into a deal to be acquired by New York-based private equity firm Sycamore Partners in a deal valued at $6.9 billion..

The office supply retailer said investment funds managed by Sycamore Partners will acquire the company in the transaction.

Company shares have lost about 22 percent of their value over the past five years as the retailer has been met with increasing online competition and a challenging environment for brick-and-mortar stores

Under the terms of the merger agreement, all Staples’ stockholders will receive $10.25 per share in cash for each share of common stock they own, which represents a premium of approximately 20 percent to the 10-day volume weighted average stock price for Staples shares for the period ended April 3, 2017.

Staples said that its board of directors unanimously approved the merger agreement and recommends that all Staples stockholders vote in favor of the transaction.


The deal is subject to regulatory and stockholder approvals and is expected to close no later than December 2017, the company said. The closing is not subject to a financing condition.

The company recently reported that total sales for the first quarter of 2017 were $4.1 billion, a decrease of 5 percent compared with the same time period a year earlier. The company closed 18 stores during the first quarter of 2017 and ended the quarter with 1,237 stores in the United States and 304 stores in Canada.


Staples has been retooling its business since its failed takeover of rival Office Depot last year. Reuters reported in May that Sycamore was one of two firms actively exploring an acquisition of the retailer.

Recent Sycamore Partners acquisitions:

• The Limited - Won auction in 2017 for $26.8 million.
• talbots - Acquired in 2012 for $391 million
• Stuart Weitzman - Acquired in 2014 for $2.2 billion. Sold to Coach, Inc. in 2015 for $574 million.
• Nine West - Acquired in 2014 for $2.2 billion.
• Jones New York - Acquired in 2014 for $2.2 billion. Sold to Authentic Brands Group in 2015.
• Hot Topic - Acquired in 2013 for $600 million.
• Coldwater Creek - Acquired in 2014.

=Staples (SPLS) to be acquired by Sycamore Partners?

• Private equity firm Sycamore Partners is on the brink of acquiring Staples (SPLS), the world's largest office supply company, in a deal that could top $6 billion, according to Reuters.
• In May, Cerberus Capital Management emerged as the front runner to secure the retailer.

  

Private equity firm Sycamore Partners is in advanced talks to acquire Staples Inc (SPLS) following an auction for the U.S. office supplies retailer, people familiar with the matter said on Wednesday, in a deal that could top $6 billion.

The acquisition would come a year after a U.S. federal judge thwarted a merger between Staples and peer Office Depot Inc (ODP) on antitrust grounds.

It would represent a bet by Sycamore that Staples could more quickly shift its business model from serving consumers to catering to companies if it were to go private.

Sycamore is in the process of finalizing a debt financing package for its bid for Staples after it prevailed over another private equity firm, Cerberus Capital Management, three sources said.

An agreement could be announced as early as next week, though negotiations between Sycamore and Staples are continuing and there is still a possibility that deal discussions could fall apart, the sources added.

Staples has 1,255 stores in the United States and 304 in Canada. It has the largest market share of office supply stores in the United States at 48 percent, and its share has increased since 2011, according to Euromonitor.

A number of private equity-backed retailers, from Sports Authority Inc to Payless ShoeSource Inc, have filed for bankruptcy in the last two years.

Sycamore, however, specializes in retail investments and has been more bullish on the sector. 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.

=Staples (SPLS) reported earnings on Thur 9 March 17 (b/o)

Staples reports EPS in-line, misses on revs; guides Q1 EPS in-line :

• Reports Q4 (Jan) earnings of $0.25 per share, in-line with the Capital IQ Consensus of $0.25; revenues fell 2.9% year/year to $4.56 bln vs the $5.03 bln Capital IQ Consensus.
• Comps:
  • North American Delivery comparable sales grew 1% compared to 4Q15.
  • The improvement in fourth quarter comparable sales primarily reflects growth in facilities supplies, computers, and breakroom supplies, partially offset by declines in tablets, ink and toner and office supplies.
• Co issues in-line guidance for Q1, sees EPS of $0.15-0.18 vs. $0.17 Capital IQ Consensus Estimate.
• For the full year 2017, the company expects to generate at least $500 million of free cash flow.
  • The company plans to close ~70 stores in North America in 2017.

Staples (SPLS), Office Depot(ODP) scrap merger deal

A federal judge has blocked the planned tie-up of Staples (SPLS) and Office Depot (ODP) due to competition concerns, prompting the office-supply chains to abandon their roughly $6B deal. "We are disappointed by this outcome and strongly believe that a merger would have benefited all of our customers in the long term," said Office Depot CEO Roland Smith. Staples will now pay a $250M break-up fee to its smaller rival for terminating the transaction.

== Staples (SPLS) reported earnings Wed 18 Nov 2015 (before open)

** charts before earnings **





** charts after earnings **

Staples reports EPS in-line, misses on revs; guides Q4 EPS in-line :

• Reports Q3 (Oct) earnings of $0.35 per share, in-line with the Capital IQ Consensus of $0.35; revenues fell 6.2% year/year to $5.59 bln vs the $5.66 bln Capital IQ Consensus.
• Comparable sales, which combines comparable store sales and Staples.com sales growth excluding the impact of changes in foreign exchange rates, decreased two percent versus the prior year.
• Co issues in-line guidance for Q4, sees EPS of $0.26-0.30 vs. $0.28 Capital IQ Consensus Estimate. For the fourth quarter of 2015, the company expects sales to decrease versus the fourth quarter of 2014 vs. estimates for sales to be down ~3.28% to $5.48 bln

Staples (SPLS) reported earnings Wed 15 Aug 2012

Staples Inc. (SPLS, $11.49, -$1.97, -14.60%) posted a 32% slump in profit in its latest quarter, hurt by an unexpected downturn in North American sales trends and continued sluggishness abroad. The nation's largest office supply chain also lowered its full-year guidance, sending shares plunging to a nine-year low. The disappointing report pressured peers Office Depot Inc. (ODP, $1.55, -$0.05, -3.13%) and OfficeMax Inc. (OMX, $5.03, -$0.16, -3.08%), leaving all three dwindling near the bottom of the S&P 1500.

 ** weekly **