Sycamore Plans to Split Staples into Three Separately Financed Entities -- Sources
June 29 2017 - 11:37AM
Dow Jones News
By Matt Jarzemsky and Dana Mattioli
Sycamore Partners intends to split Staples Inc. into three to
help fund its $6.9 billion purchase of the office-supply seller, in
another sign of the challenges facing the retail industry.
The plan calls for Staples to be divided into three separately
financed entities, according to people familiar with the matter:
U.S. retail; Canadian retail; and corporate-supply businesses. The
three groups will still remain under the same corporate
umbrella.
The move is designed to make the leveraged buyout of Staples,
announced Wednesday, an easier sell to bond and loan investors
whose appetite for retail names has soured as the industry's
prospects have waned. Their appetite will be crucial to financing
the deal, the largest LBO announced this year.
UBS AG, Bank of America Corp. and other Wall Street banks plan
to arrange bonds and loans backing only the Staples unit that
distributes paper, pens and other supplies to large business and
government customers, the people said. The delivery operation is
the largest and seen as the crown jewel of Staples.
Sycamore plans to help fund the Canadian retail business with
debt from asset manager KKR & Co., the people said. Wells Fargo
& Co. will finance the U.S. retail segment with a loan backed
by the chain's assets, they said.
Drew FitzGerald contributed to this article
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com and Dana
Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
June 29, 2017 11:22 ET (15:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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