Tuesday, February 16, 2016
Blog Publisher’s comment:
Interesting deal. Heck, I’d pay $22.5 million to pick up $550 million in additional business! This deal (potential deal) shows that Staples is hell-bent on influencing the FTC to let Staples’ Office Depot merger deal go through.
Found on streetinsider.com
February 16, 2016 4:17 PM EST
Essendant Inc. (NASDAQ: ESND) announced an agreement to purchase from Staples, Inc. (NASDAQ: SPLS) contracts with minority and woman-owned office supply resellers and their large corporate and other enterprise customers representing sales of more than $550 million annually. The transaction is subject to the successful completion of the proposed merger of Staples and Office Depot, Inc., as well as other regulatory and customary closing conditions. Under the terms of the agreement, Essendant will pay Staples approximately $22.5 million.
These commercial contracts with large corporate and other customers, often referred to as enterprise accounts, are currently serviced primarily by the resellers with Staples and Office Depot, Inc. (NASDAQ: ODP) acting as a wholesaler. If completed, the acquisition of these contracts and related assets would significantly increase Essendant's presence with enterprise accounts and enable independent dealers in combination with Essendant to effectively compete for their business nationally.
In the first year following closing, Essendant anticipates minimal impact to earnings per share due to transition costs and expects to make further investments in working capital of approximately $100 million to support the business.
The Federal Trade Commission has challenged Staples' acquisition of Office Depot on antitrust grounds. A U.S. district court hearing is scheduled to begin in March 2016 on the FTC's petition for a preliminary injunction prohibiting the consummation of the merger until completion of a trial before an FTC administrative law judge.
Posted by Joel Salus at 3:18 PM