Last week, we reported that Staples was close to finalizing a sale to Sycamore Partners, a private equity firm. It looks like the deal is just about set, with the company naming a $6.9 billion price tag—significantly higher than the original estimation of $6 billion.
According to a press release, Staples’ board of directors unanimously approved the merger agreement yesterday.
“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 our value for our stockholders,” Robert Sulentic, chairman of the board, said in the press release. “Staples’ board believes that this pricess has led to a transaction which is in the best interests of our stockholders, as well as Staples and its employees.”
This isn’t Sycamore’s first foray into the retail world. The company already owns big name brands, including Talbots, the Limited and Hot Topic, according to The New York Times.
The deal is still subject to the usual closing conditions, including stockholder approval, but is expected to close in December at the latest.
“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,” Stefan Kaluzny, managing director of Sycamore Partners, said in the release. “We have tremendous confidence in [Staples] 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’s entrepreneurial spirit and long-term vision,” Goodman said. “This transaction will enable us to drive greater valuye for our customers and immense opportunity for our business.”
Sycamore is taking over the Framingham, Massachusetts-based office supply company at a difficult moment. The company is still recovering from declining profits and a failed merger with Office Depot. However, The New York Times cited its financial disclosures, and reported that Staples only has about $1 billion in debt, which won’t be much of an issue for Sycamore, creating ample opportunities for growth and profit going forward.
But, The New York Times also speculated that, due to the company’s standing in the stock market, Sycamore might be purchasing the company to sell to another private equity firm or another retail giant, like Wal-Mart.
The story of Staples could be far from over.
