Despite the prospect of a last minute hitch, Staples’ takeover of the Illinois-based office supplier has been officially confirmed.
Under the terms of the deal, Staples will acquire all of the outstanding shares of Essendant, in a transaction worth around $996 million (€854 million).
Essendant’s Board of Directors had judged Staples’ bid to be the “superior proposal” to that of Genuine Parts Company and its subsidiary S.P. Richards, a prior agreement with whom was terminated. As a result, GPC is entitled to a $12 million (€10.2 million) “break-up fee”, which Staples is paying as part of the Essendant agreement.
The takeover had been left with lingering doubt late last week, when major Essendant shareholder Pzena Investment Management announcing that it did not believe the Staples offer was superior, and that it would not support the proposal.
That potential spanner in the works seems to have been avoided, however, with both Essendant and Staples now confirming the acquisition.
“We are excited about the opportunity to move forward with this agreement, and to work with the Essendant team to complete the partnership of these two great companies, which will ultimately deliver significant value to independent resellers and end customers across the US,” said Staples.
Essendant Chairman Charles Crovitz added: “After carefully evaluating Staples’ revised offer, including taking into account the extended regulatory process and risks associated with the S.P. Richards transaction and the continued challenges presented by the rapidly changing industry dynamics on our ability to realise value in combination with S.P. Richards, we are confident that the Staples transaction is in the best interest of Essendant shareholders. While our agreement to merge with S.P. Richards presented an attractive opportunity, we believe the Staples transaction provides superior and immediate value to our shareholders.”
“We believe combining with Staples provides a tremendous opportunity to enhance our resources and ability to serve customers, while delivering compelling and certain value to shareholders,” said Rich Phillips, CEO and President of Essendant. “I want to thank all our associates for their continued commitment and dedication as we have navigated this process over the past several months.”
