After four months and four bids, retailer Staples Inc., Framingham, MA, finally found the formula for reeling in Corporate Express NV. The offer to purchase the international office supplies distributor received the recommendation for approval from Corporate Express's supervisory and executive boards on June 11.
The move represents a significant shift in business focus for Staples that until now has centered on the retail market. After this acquisition, 60% of its business will be in the delivery and contract markets.
It's a great strategic fit that continues to build the delivery side of our business,"Paul Capelli, Staples vice president for public relations, tells MDM. In North America, delivery has been the fastest growing and most profitable segment for Staples, with an increase in sales of 14% in 2007.
Staples first approached Corporate Express with an offer in February only to be rebuffed for undervaluing the company. After upping its offer three times and going directly to Corporate Express shareholders, an agreement was reached for Staples to acquire Corporate Express €9.25 per share. Staples initially offered €7.25 per share. At current exchange rates, the deal values Corporate Express at US$4.8 billion.
The deal hasn't closed yet so it's too early to comment on specific changes that will occur, Capelli says. However, the deal will greatly expand Staples'international reach, specifically in Europe and Australia.
Peter Ventress, the current CEO of Corporate Express, will take on the role of president in Staples International, which will oversee Staples operations outside of the U.S. and Canada.
Look for more MDM analysis on the Staples-Corporate Express deal in the next issue of MDM, published on June 25, 2008.