{"id":43461,"date":"2021-01-14T11:30:34","date_gmt":"2021-01-14T19:30:34","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=43461"},"modified":"2021-01-14T14:51:37","modified_gmt":"2021-01-14T22:51:37","slug":"staples-makes-another-play-to-acquire-office-depot","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/the-week-in-imaging-twii\/editors-blog\/2021\/01\/staples-makes-another-play-to-acquire-office-depot\/","title":{"rendered":"Staples Makes Another Play to Acquire Office Depot"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

Office supplies giant Staples is taking another run at acquiring Office Depot, five years after the Federal Trade Commission (FTC) put the kibosh on a previous deal because it would violate antitrust laws and give Staples too large a piece of the retail space.<\/p>\n\n\n\n

Staples proffered a $2.1 billion deal, or $40 per share to ODP Corp., Office Depot\u2019s parent company, which represents about a 60% premium above its average closing price during the last 90 trading days. ODP also owns OfficeMax.<\/p>\n\n\n\n

The all-cash offer, Staples maintains, represents \u201ca compelling value proposition\u201d that is \u201csuperior to the intrinsic, stand-alone value\u201d of Office Depot, CNN Business reported. Should ODP balk at the offer, Staples is reportedly prepared to embark on a tender offer in March.<\/p>\n\n\n\n

In a release confirming receipt of the offer, ODP Corp. stated, \u201cConsistent with its fiduciary duties, ODP\u2019s Board of Directors is carefully reviewing the proposal in consultation with its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. As part of its review, the Board is evaluating various components of the proposal, including potential antitrust and other regulatory challenges given USR Parent\u2019s ownership of Staples and past regulatory decisions blocking the combination of the two companies, purchase price, and closing conditionality. The Company noted that, according to its letter to ODP, USR Parent expects the regulatory process to take at least six months.\u201d<\/p>\n\n\n\n

During the 2015 acquisition attempt, the purchase agreement was $6.3 billion, making the latest overture just one-third of the original deal. The news sent shares of ODP up nearly 20%.<\/p>\n\n\n\n

Privately held by Sycamore Partners, Staples will again be challenged to receive FTC approval. The company said if Office Depot was willing to divest its commercial business unit or IT management company CompuCom to a buyer that meets with FTC approval, it could help facilitate the deal. That may also entice Staples to increase its offer, Bloomberg reported.<\/p>\n\n\n\n

It is the third time overall that Staples has made a bid to acquire Office Depot; the initial overture came in 1997.<\/p>\n\n\n\n

In early 2019, Staples reached into the office technology dealership realm by acquiring DEX Imaging of Tampa, Florida.<\/p>\n\n\n\n

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Brent Martin, ARLINGTON<\/figcaption><\/figure><\/div>\n\n\n\n

Staples did not respond to a request for comment from ENX Magazine<\/em>. But Brent Martin, director of marketing for ARLINGTON, believes such a combination is vital for the long-term survival of retail brick-and-mortar operations. \u201cWork from home has once again forced these two retail giants to consider another attempt at merging,\u201d Martin said. \u201cThe growth of Amazon Business should provide those who have thwarted prior attempts to merge these companies to approve the acquisition this time around. I would expect to see more consolidation in the retail channel to follow in the coming year as traditional storefront businesses continue to contend with online superpowers.\u201d<\/p>\n\n\n\n

Jim Kahrs, president of Prosperity Plus Management Consulting, believes the biggest takeaway to come from the potential combination is Sycamore Partners\u2019 aggressive bid, which could have a domino effect eventually felt in the office technology space. \u201cActivity breeds activity,\u201d he said, \u201cand one private equity company making moves could trigger others to follow suit. It might get more private equity players back in gear. That might be the bigger impact on the industry. It will be interesting to watch.\u201d<\/p>\n\n\n\n

\"\"
Jim Kahrs, Prosperity Plus<\/figcaption><\/figure><\/div>\n\n\n\n

With Amazon having significant mindshare across the online ordering landscape, including office supplies, would the union of Staples and Office Depot have a significant influence in tilting the retail supplies scale? <\/p>\n\n\n\n

\u201cAmazon\u2019s strength isn\u2019t size, but the overall prevalence of its online platform, which has become the go-to,\u201d Kahrs added. \u201cShould Staples and Office Depot come together and create one online platform, I don\u2019t know how that changes the mindset of people to stay away from Amazon when they\u2019re looking to buy office supplies.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Office supplies giant Staples is taking another run at acquiring Office Depot, five years after the Federal Trade Commission (FTC) put the kibosh on a previous deal because it would violate antitrust laws and give Staples too large a piece of the retail space. Staples proffered a $2.1 billion deal, or $40 per share to ODP Corp., Office Depot\u2019s parent company, which represents about a 60% premium above its average closing price during the last 90 trading days. ODP also owns OfficeMax. The all-cash offer, Staples maintains, represents \u201ca compelling value proposition\u201d that is \u201csuperior to the intrinsic, stand-alone value\u201d of Office Depot, CNN Business reported. Should ODP balk at the offer, Staples is reportedly prepared to embark on a tender offer in March. In a release confirming receipt of the offer, ODP Corp. stated, \u201cConsistent with its fiduciary duties, ODP\u2019s Board of Directors is carefully reviewing the proposal in consultation with its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. As part of its review, the Board is evaluating various components of the proposal, including potential antitrust and other regulatory challenges given USR Parent\u2019s ownership of Staples and past regulatory decisions blocking the combination of the two companies, purchase price, and closing conditionality. The Company noted that, according to its letter to ODP, USR Parent expects the regulatory process to take at least six months.\u201d During the 2015 acquisition attempt, the purchase agreement was $6.3 billion, making the latest overture just one-third of the original deal. The news sent shares of ODP up nearly 20%. Privately held by Sycamore Partners, Staples will again be challenged to receive FTC approval. The company said if Office Depot was willing to divest its commercial business unit or IT management company CompuCom to a buyer that meets with FTC approval, it could help facilitate the deal. That may also entice Staples to increase its offer, Bloomberg reported. It is the third time overall that Staples has made a bid to acquire Office Depot; the initial overture came in 1997. In early 2019, Staples reached into the office technology dealership realm by acquiring DEX Imaging of Tampa, Florida. Staples did not respond to a request for comment from ENX Magazine. But Brent Martin, director of marketing for ARLINGTON, believes such a combination is vital for the long-term survival of retail brick-and-mortar operations. \u201cWork from home has once again forced these two retail giants to consider another attempt at merging,\u201d Martin said. \u201cThe growth of Amazon Business should provide those who have thwarted prior attempts to merge these companies to approve the acquisition this time around. I would expect to see more consolidation in the retail channel to follow in the coming year as traditional storefront businesses continue to contend with online superpowers.\u201d Jim Kahrs, president of Prosperity Plus Management Consulting, believes the biggest takeaway to come from the potential combination is Sycamore Partners\u2019 aggressive bid, which could have a domino effect eventually felt in the office technology space. \u201cActivity breeds activity,\u201d he said, \u201cand one private equity company making moves could trigger others to follow suit. It might get more private equity players back in gear. That might be the bigger impact on the industry. It will be interesting to watch.\u201d With Amazon having significant mindshare across the online ordering landscape, including office supplies, would the union of Staples and Office Depot have a significant influence in tilting the retail supplies scale? \u201cAmazon\u2019s strength isn\u2019t size, but the overall prevalence of its online platform, which has become the go-to,\u201d Kahrs added. \u201cShould Staples and Office Depot come together and create one online platform, I don\u2019t know how that changes the mindset of people to stay away from Amazon when they\u2019re looking to buy office supplies.\u201d<\/p>\n","protected":false},"author":166,"featured_media":43462,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[80,1650,82,3187,1638],"tags":[1117],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/43461"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=43461"}],"version-history":[{"count":3,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/43461\/revisions"}],"predecessor-version":[{"id":43473,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/43461\/revisions\/43473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/43462"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=43461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=43461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=43461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}