Are you a retail investor? If so, you might want to pay close attention to the following: On Thursday, September 7, Staples (NASDAQ:$SPLS) shareholders gave the green light for the sale of the Framingham office supplier to Sycamore Partners, which is a private equity firm that owns various other retailers.
Based on the Massachusetts-based company’s SEC filing, Staples shareholders approved the deal by a margin of more than 24-to-1.
It’s not a total surprise to hear that Staples shareholders approved of the sale, as the $6.9 billion deal will take the company private at a time when it has struggled to compete with the likes of Amazon (NASDAQ:$AMZN), as well as changing business and consumer buying habits. In 2016, after Staples closed 48 stores, the retailer lost $615 million. One might think that those numbers are bad, but wait until you hear this: Staples said earlier this year that it plans to close another 70 stores in 2017.
Staples (NASDAQ:$SPLS) has pivoted towards business-to-business services as of late, and many speculate this shift in direction is due to the company’s failed attempt of a merger with Office Depot (NASDAQ:$ODP) last year. Why didn’t the merge go through? Because a federal judge rejected the deal.
According to Staples, its board of directors unanimously approved the sale to Sycamore. Not only that, they also urged shareholders to approve it. If all goes as planned, the deal is forecast to close before the end of 2017.
Interestingly, the Wall Street Journal reported that the Sycamore purchase is the largest leveraged buyout announced in 2017.
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