Cerberus Capital Management Affiliate To Buy Stake In Staples’ European Business
Staples, Inc. will sell a controlling interest in its European operations to an affiliate of Cerberus Capital Management, L.P. Staples’ European business consists of retail, contract and online businesses in 16 countries generating aggregate annual sales of approximately €1.7 billion (approximately $1.8 billion). Staples participates in the promotional products industry as distributor Staples Promotional Products (PPAI 108945).
Upon closing of the transaction, the Staples Europe business will be separated into a privately held company controlled by an affiliate of Cerberus. The new company will enter into a licensing agreement with Staples for the use of certain Staples intellectual property, including its brand, a global accounts agreement and transition services agreement governing a variety of services for defined periods. The company will operate under the Staples banner name and other sub-brands in European markets, and its associates will continue to be employees of Staples Europe, which will maintain its headquarters in Amsterdam. Olof Persson, an executive with Cerberus’ operations team and the former president and CEO of Volvo Group, will be appointed executive chairman of the new company.
The agreement with Cerberus follows Staples’ recent announcement of the sale of its UK retail business to Hilco Capital Limited, which also aligned with Staples’ new strategic direction of right-sizing its international business.
Staples is retaining a 15-percent equity interest in the business and will be represented on its board of directors following the closing of the transaction. In accordance with applicable law, Staples will now consult relevant European works councils. Subject to these consultations and satisfaction of other conditions, the parties anticipate closing the transaction during the first quarter of Staples’ fiscal 2017 year.
“One of our top strategic priorities has been to narrow our geographic focus on North America, and this is an important step toward simplifying our operations and better positioning Staples for sustainable long-term growth,” says Shira Goodman, chief executive officer and president, Staples, Inc. “We believe that working with Cerberus will help enable the future success of the Staples Europe business, benefiting our associates and customers in the region.”
Steven F. Mayer, co-head of global private equity and senior managing director of Cerberus, adds, “We intend to instill a keen sense of urgency, focus and commitment throughout the entire Staples Europe organization, enhance the company’s competitive position across its markets and channels, and return the business to growth by capitalizing on its many assets, including its well-recognized brands, strong customer relationships, dedicated sales force, advanced distribution and IT infrastructure, comprehensive pan-European footprint, and talented management and associates. Our strategy is to invest in a variety of initiatives designed to strengthen Staples Europe’s position as the leading provider of solutions to small, mid-sized and large businesses in Europe, including sales force expansion, further diversification of products and services beyond office supplies, and next-generation technologies. Our unrelenting focus throughout the organization will be on satisfying our customers and on operational execution.”