On Friday, Staples acquired office-supply competitor Essendant for $482.7m in cash.
And, since private-equity firm Sycamore Partners bought the paper pushers in a $6.9B deal last year, they’ve been stapling as many supplies as possible to their office empire to keep the upper hand in the struggling industry.
Mr. Steal yo Stapler
Essendant had an exclusive contract with its former parent company, Genuine Parts — but, Staples’ owner is so eager to corner the office supply market that it’s paying a $12m breakup fee in addition to absorbing the paper pushers’ $513.3m in debt.
Staples even sweetened the deal by paying a 51% premium over the company’s current share price. How did Essendant score such a storybook ending?
Well, make no mistake, this deal was made out of desperation.
People just aren’t buying paper Rolodexes like they used to…
For Staples’ parent company, consolidation is the only way to make a profit as demand decreases.
Despite losing $267m last year, Essendant fielded 3 merger offers.
Staples isn’t the only office supply store struggling to keep things together: Office Depot launched an in-store co-working space in a desperate attempt to squeeze a few more dollars out of its dust-gathering depots. File that under D for “desperate”…