June 28, 2017

NYC equity firm to buy Staples for $7B

If the private equity sale goes through, by 2018 Staples will no longer be publicly traded.

Staples will go private by December as New York City private equity firm Sycamore Partners announced Wednesday evening plans to purchase the publicly traded Framingham office supply retailer for $6.9 billion.

Staples' board of directors has unanimously approved the merger and is recommending all Staples stockholders vote in favor of the deal. Stockholders will receive $10.25 per share in cash.

"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," said Stefan Kaluzny, managing director of Sycamore Partners, in a press release. "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 deal is expected to close in December, pending regulatory and stockholder approval. Wednesday's announcement comes after widespread media reports last week about Sycamore and Staples entering advanced acquisition talks.

The deal would come a little over a year after a federal judge rejected a merger between Staples and Office Depot on antitrust grounds. Since then, Staples has taken steps to redefine its brand by offering more business-to-business services. Sales and delivery of those services now account for most of the company's sales, according to Staples.

Staples reported a net loss of $615 million in 2016. The company, which has 1,300 stores in the U.S. and 1,900 worldwide, closed 48 stores last year and said in March that it will close 70 in 2017.

Following the announcement late Wednesday, shares of Staples were trading at $10.13 Thursday morning, up from $9.22 at 3:30 p.m. Wednesday.

Sycamore specializes in consumer and retail investments, according to its website. Its portfolio includes retailers like The Limited, Hot Topic, Belk, Talbots, and Nine West Holdings.

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