The Recycler has reported that Staples Inc (North America) has sold its European business (exluding the UK) to Cerberus Capital Management.
The Recycler also reported earlier this year that Cerberus, an investment firm and “one of Wall Street’s most powerful hedge funds”, had been in talks to rescue Staples Europe. Financial firm KPMG had been “appointed to review the future of the European business” , which caused rumours that Staples would either “pull the plug on the business” or try to restructure and make huge cutbacks, as it has been trying to reduce overheads since the failed merger with Office Depot.
Now, in a press release, Staples and Cerberus confirmed they have “entered into an agreement in relation to the sale of a controlling interest in Staples’ European operations” to a Cerberus “affiliate”, with the business including “retail, contract, and online businesses in 16 countries generating aggregate annual sales of approximately €1.7 billion ($1.8 billion)”.
Staples will retain a “15 percent equity interest”, and be represented on the board of directors, with the next step to “consult relevant European works councils […] in accordance with applicable law”. Depending on the consultations and “satisfaction of other conditions, the parties anticipate closing the transaction during the first quarter” of the next financial year.
When the deal is complete, Staples Europe “will be separated into a privately-held company controlled by an affiliate of Cerberus”, which will “enter into a licensing agreement with Staples for the use of certain Staples intellectual property” including the brand, “a global accounts agreement” and “transition services agreement governing a variety of services for defined periods”.
The company will continue to operate “under the Staples banner name and other sub-brands” in the European market, and associates will “continue to be employees of Staples Europe”, which will also remain headquartered in Amsterdam. Additionally, Olof Persson, an executive in Cerberus’ operations team and former President and CEO of Volvo Group, will be Executive Chairman.
Shira Goodman, CEO and President of Staples, commented: “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. 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, added: “We intend to instil a keen sense of urgency, focus, and commitment throughout the entire Staples Europe organisation, enhance the company’s competitive position across its markets and channels, and return the business to growth by capitalising on its many assets, including its well-recognised brands, strong customer relationships, dedicated sales force, advanced distribution and IT infrastructure, comprehensive pan-European footprint, and talented management and associates.”
Recently, it was reported that the UK arm has been sold to a restructuring company, Hilco, which will close the stores, with Hilco stating that it “was planning to phase out Staples-branded shops over the coming months”, though the fate of its online and B2B operations were not discussed, and a potential 1,000 jobs could be lost.