FRAMINGHAM, Mass. and
DEERFIELD, Ill., Sept. 14, 2018 /PRNewswire/ -- Staples, Inc.
and Essendant Inc. (NASDAQ: ESND) today announced that they have
entered into a definitive agreement under which an affiliate of
Staples, the world's largest office solutions provider, will
acquire all of the outstanding shares of Essendant common stock for
$12.80 per share in cash, or a
transaction value of $996 million
including net debt.
The transaction follows the determination by Essendant's Board
of Directors, after consultation with Essendant's legal and
financial advisors, that the Staples proposal constituted a
"Superior Proposal" as defined in Essendant's previously announced
merger agreement to combine with Genuine Parts Company's (NYSE:
GPC) ("GPC") S.P. Richards business (the "S.P. Richards
agreement"). Consistent with that determination, and
following the expiration of the three-day waiting period during
which GPC did not propose any amendments to the S.P. Richards
agreement, Essendant terminated that agreement. In connection
with the termination, GPC is entitled to a $12 million break-up fee, which Staples is paying
as part of its agreement with Essendant.
"We are excited about the opportunity to move forward with this
agreement, and to work with the Essendant team to complete the
partnership of these two great companies, which will ultimately
deliver significant value to independent resellers and end
customers across the U.S.," Staples said.
"After carefully evaluating Staples' revised offer, including
taking into account the extended regulatory process and risks
associated with the S.P. Richards transaction and the continued
challenges presented by the rapidly changing industry dynamics on
our ability to realize value in combination with S.P. Richards, we
are confident that the Staples transaction is in the best interest
of Essendant shareholders," said Charles
Crovitz, Chairman of Essendant. "While our agreement to
merge with S.P. Richards presented an attractive opportunity, we
believe the Staples transaction provides superior and immediate
value to our shareholders."
Ric Phillips, President and Chief
Executive Officer of Essendant added, "We believe combining with
Staples provides a tremendous opportunity to enhance our resources
and ability to serve customers, while delivering compelling and
certain value to shareholders. I want to thank all our
associates for their continued commitment and dedication as we have
navigated this process over the past several months."
Transaction Terms
The $12.80 per share purchase
price reflects a 51% premium to Essendant's share price on
April 11, 2018, the day before the
company announced plans to merge with GPC's S.P. Richards business,
and a 10.3x multiple of last-twelve-months Adjusted EBITDA.
The transaction will be implemented through a cash tender offer
at $12.80 per share. The transaction
is conditioned upon, among other things, the number of Essendant
shares included in the tender offer, together with the 11.15% of
Essendant's outstanding common shares currently owned by Staples
and its affiliates, representing more than 50% of Essendant's
outstanding common shares, expiration of all applicable waiting
periods under the Hart-Scott-Rodino (HSR) Antitrust Improvements
Act of 1976, and other customary closing conditions. If the tender
offer is consummated, the tender offer will be followed by a merger
in which any shares of Essendant common stock not purchased in the
offer will be converted into the right to receive the same
$12.80 per share in cash. The
transaction is not subject to a financing condition and is expected
to close in the fourth quarter.
Barclays and Morgan Stanley & Co. LLC are acting as
financial advisors and Kirkland & Ellis LLP is acting legal
counsel to Staples. Citigroup Global Markets Inc. is acting as
financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP
is acting as legal counsel to Essendant.
Cautionary Statement
This press release contains forward-looking statements,
including statements regarding the proposed acquisition (the
"Proposed Acquisition") of Essendant Inc. ("Essendant") by Staples,
Inc. ("Staples"). From time to time, oral or written
forward-looking statements may also be included in other
information released to the public. These forward-looking
statements are intended to provide management's current
expectations or plans for our future operating and financial
performance, based on assumptions currently believed to be valid.
Forward-looking statements often contain words such as "may,"
"can," "could," "would," "should," "expects," "anticipates,"
"estimates," "intends," "plans," "believes," "seeks," "will," "is
likely to," "scheduled," "positioned to," "continue," "forecast,"
"aim," "goal," "target," "predicting," "projection," "potential" or
similar expressions, although not all forward-looking statements
contain these words. Forward-looking statements may include
references to goals, plans, strategies, objectives, projected costs
or savings, anticipated future performance, results, events or
transactions of Essendant or Staples and the expected timing of the
Proposed Acquisition and other statements that are not strictly
historical in nature. These forward-looking statements are based on
management's current expectations, forecasts and assumptions and
could ultimately prove inaccurate. This means the forward-looking
statements involve a number of risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements, including, but not
limited to: uncertainties as to the timing of the tender offer and
the subsequent merger; uncertainties as to how many Essendant
stockholders will tender their shares in the offer; the possibility
that competing offers will be made; the ability to receive the
required consents and regulatory approvals for the Proposed
Acquisition and to satisfy the other conditions to the closing of
the Proposed Acquisition on a timely basis or at all, including
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR
Act); the occurrence of events that may give rise to a right of one
or both of Essendant and Staples to terminate the merger agreement;
the risk that, prior to the completion of the transaction,
Essendant's business and its relationships with employees,
collaborators, vendors and other business partners could experience
significant disruption due to transaction-related uncertainty; the
risk that stockholder litigation in connection with the tender
offer or the merger may result in significant costs of defense,
indemnification and liability; negative effects of the announcement
of the Proposed Acquisition on the market price of Essendant's
common stock and/or on Essendant's or Staples' respective
businesses, financial condition, results of operations and
financial performance; risks associated with transaction-related
litigation; the ability of Essendant to retain and hire key
personnel; and the risks and uncertainties pertaining to
Essendant's business, including those detailed under "Risk Factors"
and elsewhere in Essendant's public periodic filings with the SEC.
There can be no assurance that the Proposed Acquisition or any
other transaction described above will in fact be consummated in
the manner described or at all. Stockholders, 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. 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. For
additional information on identifying factors that may cause actual
results to vary materially from those stated in forward-looking
statements, please see the statements and reports on Forms 10-K,
10-Q and 8-K, Schedule TO and Schedule 14D-9 filed with or
furnished to the U.S. Securities and Exchange Commission (the
"SEC") by Essendant, Staples, Egg Parent Inc. ("Parent") and Egg
Merger Sub Inc. ("Merger Sub") and other written statements made by
Essendant and Staples from time to time. The forward-looking
information herein is given as of this date only and is qualified
in its entirety by this cautionary statement, and Essendant and
Staples undertake no obligation to revise or update it.
Additional Information
The tender offer for shares of Essendant's common stock has not
yet commenced. This press release does not constitute an offer to
buy or a solicitation of an offer to sell any securities. The
solicitation and offer to buy common stock of Essendant will be
made only pursuant to an offer to purchase, letter of transmittal
and related materials that Staples, Parent and Merger Sub intend to
file with the SEC. At the time the tender offer is commenced,
Parent and Merger Sub will file with the SEC a Tender Offer
Statement on Schedule TO, including the offer to purchase, a letter
of transmittal and other related materials, with respect to the
tender offer, and thereafter Essendant will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer. INVESTORS AND STOCKHOLDERS
ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO
PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER TENDER OFFER
DOCUMENTS) AND THE SCHEDULE 14D-9, INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO, AND OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC WHEN THEY BECOME AVAILABLE CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION AND THE PARTIES THERETO. Investors and
stockholders may obtain the Schedule TO, the Schedule 14D-9 and
other relevant documents filed with the SEC free of charge from the
SEC's website at www.sec.gov. The documents filed by Essendant with
the SEC may also be obtained free of charge at Essendant's website
at www.essendant.com or by contacting Essendant's Investor
Relations Department at (847) 627-2900, and the documents filed by
Parent and Merger Sub with the SEC may also be obtained by
contacting D.F. King & Co., Inc. at 212-269-5550.
About Staples, Inc.
Staples brings technology and people together in innovative ways
to consistently deliver products, services and expertise that
elevate and delight customers. Staples is in business with
businesses and is passionate about helping businesses work better.
Headquartered outside of Boston,
Mass., Staples, Inc. operates primarily in North America. More information about Staples
is available at www.staples.com.
About Essendant
Essendant Inc. is a leading national distributor of workplace
items, with 2017 net sales of $5.0
billion. The company provides access to a broad assortment
of over 170,000 items, including janitorial and breakroom supplies,
technology products, traditional office products, industrial
supplies, cut sheet paper products, automotive products and office
furniture. Essendant serves a diverse group of customers, including
independent resellers, national resellers and e-commerce
businesses. The Company's network of distribution centers enables
the Company to ship most products overnight to more than ninety
percent of the U.S.
Staples Contacts
Investors:
D.F. King & Co., Inc.
Edward McCarthy / Kristian Klein, 212-269-5550
Media:
Gladstone Place Partners
Michael Flaherty, 212-230-5930
Essendant Contacts
Janet Zelenka – Senior Vice
President and CFO – (847) 627-7000
Ryon Wharton – Vice President
Finance and Investor Relations – (847) 627-2900
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SOURCE Essendant Inc.