Staples, Inc. and Cerberus Capital Management have entered into an agreement in relation to the sale of a controlling interest in Staples’ European operations to a Cerberus affiliate.
Staples’ European business consists of retail, contract, and online businesses in 16 countries. The company said it is retaining a 15% equity interest in the business and will be represented on its board of directors following the closing of the transaction. In accordance with applicable law, Staples will now consult relevant European works councils. Subject to these consultations and satisfaction of other conditions, the parties anticipate closing the transaction during the first quarter of Staples’ fiscal 2017 year.
“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, CEO and president, Staples. “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.”
Upon closing of the transaction, 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 U.K. retail business to Hilco Capital Limited.