DEERFIELD, Ill., Feb. 16, 2016 /PRNewswire/ -- Essendant Inc.
(NASDAQ: ESND), a leading supplier of workplace essentials, today
announced an agreement to purchase from Staples, Inc. (NASDAQ:
SPLS) contracts with minority and woman-owned office supply
resellers and their large corporate and other enterprise
customers representing sales of more than $550 million annually. The transaction is
subject to the successful completion of the proposed merger of
Staples and Office Depot, Inc., as well as other regulatory and
customary closing conditions. Under the terms of the
agreement, Essendant will pay Staples approximately $22.5 million.
These commercial contracts with large corporate and other
customers, often referred to as enterprise accounts, are currently
serviced primarily by the resellers with Staples and Office Depot,
Inc. (NASDAQ: ODP) acting as a wholesaler. If completed, the
acquisition of these contracts and related assets would
significantly increase Essendant's presence with enterprise
accounts and enable independent dealers in combination with
Essendant to effectively compete for their business
nationally.
In the first year following closing, Essendant anticipates
minimal impact to earnings per share due to transition costs and
expects to make further investments in working capital of
approximately $100 million to support
the business.
The Federal Trade Commission has challenged Staples' acquisition
of Office Depot on antitrust grounds. A U.S. district court
hearing is scheduled to begin in March
2016 on the FTC's petition for a preliminary injunction
prohibiting the consummation of the merger until completion of a
trial before an FTC administrative law judge.
Forward-Looking Statements
Statements in this news release regarding the proposed transaction
between Essendant and Staples, the future financial impact of the
proposed transaction, the proposed transaction's effect on the
ability of Essendant and its independent dealers to compete for
enterprise accounts, and any other statements about Essendant's
future plans, capabilities, expectations, beliefs, goals or
prospects constitute forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Any
statements that are not statements of historical fact (including
statements containing "plans," "believes," "anticipates,"
"expects," "will," "would," "scheduled to," "subject to" and
similar expressions) should also be considered forward looking
statements. There are a number of important factors that could
cause actual results or events to differ materially from those
indicated by such forward looking statements, including: the risk
that the conditions to the proposed transaction between Essendant
and Staples are not satisfied; potential adverse reaction or
changes to business or employee relationships, including those
resulting from the announcement of the proposed transaction; timing
of the transaction; competitive responses to the proposed
transaction; unexpected costs or charges resulting from the
transaction; the risk that covenants of Staples are not performed
timely; and the other factors described in Essendant's annual
Report on From 10-K for the year ended December 31, 2014.
Shareholders, potential investors and other readers are urged to
consider these risks and uncertainties in evaluating
forward-looking statements and are cautioned not to place undue
reliance on the forward-looking statements. For additional
information about risks and uncertainties that could materially
affect Essendant's results, please see the company's Securities and
Exchange Commission filings. The forward-looking information
in this news release is made as of this date only, and the company
does not undertake to update any forward-looking
statement. Investors are advised to consult any further
disclosure by Essendant regarding the matters discussed
in this release in its filings with the Securities and
Exchange Commission and in other written statements it makes from
time to time. It is not possible to anticipate or foresee all
risks and uncertainties, and investors should not consider any list
of risks and uncertainties to be exhaustive or complete.
Company Overview
Essendant Inc. is a leading supplier of workplace essentials, with
2014 net sales of $5.3 billion. The
company stocks a broad assortment of over 160,000 items, including
technology products, traditional office products, janitorial and
breakroom supplies, office furniture, industrial supplies, and
automotive aftermarket tools. The company's network of 74
distribution centers enables the company to ship most products
overnight to more than ninety percent of the U.S. and major cities
in Canada. For more information,
visit www.essendant.com.
Essendant common stock trades on the NASDAQ Global Select Market
under the symbol ESND.
For Inquiries:
Kaveh Bakhtiari
investorrelations@essendant.com
847.627.2900
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SOURCE Essendant Inc.