Blog Coverage Staples and Cerberus Capital Management Complete the Sale of Majority Interest in Staples European Operations
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LONDON, UK / ACCESSWIRE / March 1, 2017 / Active Wall St. blog coverage looks at the headline from office supplies major Staples, Inc. (NASDAQ: SPLS) as the Company and Cerberus Capital Management, L.P. (Cerberus) announced on February 28, 2017, that they had completed the sale of controlling interest in Staples European Operations to an affiliate of Cerberus. Staples Inc. will continue to hold 15% stake in the European operations. The European operations include Staples' retail, contract, and online businesses with presence in 17 countries and an annual sale of approximately €1.7 billion. Register with us now for your free membership and blog access at:
One of Staples' competitors within the Specialty Retail, Other space, The Michaels Companies, Inc. (NASDAQ: MIK), announced on February 20, 2017, that it will report its Q4 and full year results on Tuesday, March 07, 2017, before the opening of financial markets. In connection with the announcement, the Company will host a conference call at 8:00 a.m. CT on Tuesday, March 07, 2017, to discuss its financial and operational results. AWS will be initiating a research report on Michaels Cos. in the coming days.
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New York based Cerberus is a leading private equity firm that invests in multiple asset classes globally. It has more than $30 billion capital under management which it has invested in operational private equity, global credit opportunities and real estate.
Sharing his thoughts on the matter, Shira Goodman, CEO and President, Staples, Inc. said:
"With the close of this deal, Staples' global customers with a European presence will have their business needs met through the comprehensive services Staples Solutions will offer, while we will be able to fully devote our resources to growing our business in North America."
Steven F. Mayer, Co-Head of Global Private Equity and Senior Managing Director of Cerberus added:
"We see great value in Staples Solutions and are confident that the Company's core strengths, when combined with an unwavering commitment to its customers and suppliers and Cerberus' hallmark operational rigor, will strengthen Staples Solutions' position as the leading provider of workplace products, services, and solutions to small, mid-sized, and large businesses in Europe."
As agreed earlier by the two Companies, and after the deal is finalized Olof Persson, an executive with Cerberus' operations team and the former President and CEO of Volvo Group, will take over as Chairman of Staples Solutions. The other members of the Staples Solutions Board will include Stassi Anastassov, former President and CEO of Global Duracell, The Procter & Gamble Company; John Buchta, Senior Vice President, Tax and Treasurer of Staples, Inc.; Chan W. Galbato, CEO of Cerberus Operations and Advisory Company, LLC; Steven F. Mayer, Co-Head of Global Private Equity and Senior Managing Director of Cerberus Capital Management, L.P.; and Peter Ventress, former CEO of Berendsen PLC, International President of Staples, Inc., and CEO of Corporate Express NV.
The deal
An affiliate of Cerberus had acquired controlling stake in Staples European Operations in December 2016. Post the sale, the European Operations would operate as Staples Solutions B.V. ("Staples Solutions") and become a privately-owned Company controlled by the Cerberus affiliate. To complete the deal, Staples Solutions would sign various agreements with Staples including a licensing agreement for the use of certain Staples intellectual property, like its brand etc.; a global accounts agreement; and transition services agreement which would govern a variety of services for pre-agreed periods. The Staples Solutions will be headquartered in Amsterdam and its associates will continue to be employees of Staples Europe.
Reasons for the sale of international operations
The decision to sell its European Operations is a part of Staples long-term strategy. In recent years, Staples business had been struggling to keep up its sales and profits in the face of growing online competition and falling demand for office supplies and products. The situation was further compounded when its merger with Office Depot failed. The $6.3 billion merger was blocked by a US Federal Judge in May 2016 on the objections raised by the Federal Trade Commission. Due to the failure of the merger, Staples had to pay $250 million to Office Depot as breakup fees. Staples had taken a strategic business decision to restructure and resize its international business so that it could focus on its business in North America.
Staples had also sold off its UK retail business to Hilco Capital Limited in November 2016. Interestingly, on February 27, 2017, Hilco Capital announced that all the Staples stores acquired by it will be renamed as "Office Outlet".
Stock Performance
At the close of trading session on Tuesday, February 28, 2017, Staples' share price finished trading session at $8.99, falling 3.44%. A total volume of 9.64 million shares exchanged hands, which was higher than the 3 months average volume of 6.18 million shares. The stock has advanced 8.72% and 0.26% in the last six months and past twelve months, respectively. The stock has a dividend yield of 5.34% and currently has a market cap of $5.84 billion.
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