Staples To Acquire Office Depot At An Equity Value Of $6.3 Bln

(RTTNews) - Office supplies retailers Staples Inc. (SPLS) and Office Depot, Inc. (ODP) Wednesday said they have entered into a definitive agreement for Staples to acquire all outstanding shares of Office Depot in a cash and stock deal. The transaction values Office Depot at an equity value of $6.3 billion.

Staples said the transaction generates significant value for shareholders, and is accretive to earnings per share in the first year post-closing.

Under the terms of the agreement, Office Depot shareholders will receive, for each share, $7.25 in cash and 0.2188 of a share in Staples stock at closing.

Based on Staples closing share price on February 2, the last trading day prior to initial media speculation around a possible deal, the transaction values Office Depot at $11.00 per share. This represents a premium of 44 percent over the closing price of Office Depot shares as of the same day.

The agreement has been unanimously approved by each company's Board of Directors. With the acquisition of Office Depot, Staples will have pro forma annual sales of about $39 billion.

The deal is expected to close by the end of calendar year 2015. Staples will remain focused on its strategic reinvention plan, and Office Depot will concentrate on its integration of OfficeMax during this period.