US office products retailer Staples has sold a controlling interest in its European division to an affiliate of Cerberus Capital Management.
The Staples Europe business consists of retail, contract, and online businesses in 16 countries generating aggregate annual sales of approximately €1.7 billion. Staples is retaining a 15 per cent equity interest in the business and will be represented on its board of directors following the closing of the transaction.
“One of our top strategic priorities has been to narrow our geographic focus on North America, and this is an important step toward simplifying our operations and better positioning Staples for sustainable long-term growth,” said Shira Goodman, Staples CEO and president.
“We believe that working with Cerberus will help enable the future success of the Staples Europe business, benefiting our associates and customers in the region.”
Steven F Mayer, co-head of global private equity and senior MD of Cerberus said he planned to instill “a keen sense of urgency, focus, and commitment throughout the entire Staples Europe organisation” and enhance the company’s competitive position across its markets and channels, returning the business to growth.
“Our strategy is to invest in a variety of initiatives designed to strengthen Staples Europe’s position as the leading provider of solutions to small, midsized, and large businesses in Europe, including sales force expansion, further diversification of products and services beyond office supplies, and next-generation technologies. Our unrelenting focus throughout the organisation will be on satisfying our customers and on operational execution.”
Once the deal is closed, the Staples Europe business will be separated into a privately-held company controlled by an affiliate of Cerberus. The new company will enter into a licensing agreement with Staples for the use of certain Staples intellectual property, including its brand, a global accounts agreement, and transition services agreement governing a variety of services for defined periods. The company will operate under the Staples banner name and other sub-brands in European markets, and its associates will continue to be employees of Staples Europe, which will maintain its headquarters in Amsterdam. Olof Persson, an executive with Cerberus’ operations team and the former president and CEO of Volvo Group, will be appointed executive chairman of the new company.
The agreement with Cerberus follows Staples’ recent announcement of the sale of its UK retail business to Hilco Capital Limited, which also aligned with Staples’ new strategic direction of “right-sizing” its international business.
Headquartered outside of Boston, Staples operates throughout North and South America, Europe, Asia, Australia and New Zealand.
