Staples bought by private equity firm for $6.9 billion
NEW YORK - Private equity firm Sycamore is buying office supplies chain Staples (SPLS) for $6.9 billion.
The companies said Wednesday that shareholders of Framingham, Massachusetts-based Staples will get $10.25 per share.
Staples stock closed Wednesday up 77 cents, or 8.4 percent, to $9.93 on a late-afternoon report of a deal. The stock rose an additional 1.5 percent in after-hours trading.
This transaction marks the biggest leveraged buyout of the year thus far, according to The Wall Street Journal. The companies said they expect this deal to close by the end of the year.
Reports back in April said Staples was in deal talks, less than a year after it dropped a $6.3 billion merger with rival Office Depot (ODP) because of opposition from antitrust regulators.
After the Office Depot deal fell through, longtime Staples CEO Ron Sargent announced he was stepping down as chief executive but would remain as board chairman through the end of the fiscal year in January.
Changing shopping patterns, like the shift to online buying, have hurt megastores such as Staples. The onetime go-to destination for office supplies, Staples found that business drying up in the wake of the Great Recession. Offices needed less paper and toner than they did before, and online rivals ate into the company's sales. In the last fiscal year, it lost almost $1.5 billion.
Sycamore, based in New York, has a large number of retail chains in its portfolio, such as Talbots, The Limited and Nine West.