In May, Staples was in talks with a few private-equity firms over the possibility of a sale. As a result, Staples initially refused a takeover offer from Cerberus Capital Management, leaving only Sycamore Partners left in the race. Now, sources told Reuters that Staples is quickly approaching a deal with Sycamore worth an estimated $6 billion or more.
If this were to go through, it could pave the way for a newly private Staples to cater more toward business customers rather than retail consumers.
According to Reuters, Sycamore is currently finalizing a debt financing package for its bid for the Framingham, Massachusetts-based company. If the two companies come to an agreement, it could be announced as early as next week, but it’s not set in stone just yet.
Reuters reported another fact that could point toward Staples’ shift from the retail sector to the businesss-to-business world:
Private-equity acquisitions of retailers have become increasingly rare, as the investment firms worry about increasing headwinds facing the industry and their portfolio companies struggle with the debt burden left behind from leveraged buyouts. Retail deals comprised the smallest share of mergers and acquisitions in the first quarter of the year, according to Thomson Reuters data.
A number of private equity-backed retailers, from Sports Authority Inc to Payless ShoeSource Inc, have filed for bankruptcy in the last two years.
We’ll closely monitor this story as it develops.
