What do you make of the deal?
16 replies (most recent on top)
watch your prices
Doneith Staples... came across wb mason. Have tried all week to get an order from Staples. On tues it said order had been delivered. Checked my frobt door then the back door. nothing. Called Staples ed morning. They reordered , today got same message....order has been delivered but I still see nothing. Dont know what they are doing with the orders butbut i orfered from wb mason and had no ptoblem getting what i ordered. Will continue to order from wb mason.
yep
Synergies will probably equate to 35% labor reduction
Desperation is a very good way to put it.
Moves made to try to increase revenue but in the end, not margin.
This deal was made out of desperation.
On Friday, Staples acquired office-supply competitor Essendant for $482.7m in cash.
And, since private-equity firm Sycamore Partners bought the paper pushers in a $6.9B deal last year, they’ve been stapling as many supplies as possible to their office empire to keep the upper hand in the struggling industry.
Mr. Steal yo Stapler
Essendant had an exclusive contract with its former parent company, Genuine Parts — but, Staples’ owner is so eager to corner the office supply market that it’s paying a $12m breakup fee in addition to absorbing the paper pushers’ $513.3m in debt.
Staples even sweetened the deal by paying a 51% premium over the company’s current share price. How did Essendant score such a storybook ending?
Well, make no mistake, this deal was made out of desperation.
People just aren’t buying paper Rolodexes like they used to…
For Staples’ parent company, consolidation is the only way to make a profit as demand decreases.
Despite losing $267m last year, Essendant fielded 3 merger offers.
Staples isn’t the only office supply store struggling to keep things together: Office Depot launched an in-store co-working space in a desperate attempt to squeeze a few more dollars out of its dust-gathering depots. File that under D for “desperate”…
Here is something to chew on -
Essendant Inc., a $5 billion office solutions provider that both completes and cooperates with Amazon Business.
Staples WILL NOT catch up to Amazon Business.... Staples is STILL doomed!
Sycamore is gunning for WB Mason hence the Essendant purchase. WB Mason has shamed Staples to no end in their own backyard. Once Sycamore buys WB Mason Staples will reclaim the Northeast market.
One of Essendant’s top customers is WB Mason, a major competitor of Staples.
Now Staples will own its competition’s major supplier giving them control over pricing.
My guess it Staples will eventually own WB Mason too.
@V7oawlY-wkv Essendant doesn't need as many sales reps based on their model. If they are a wholesaler, then they would just be calling on smaller distributors. Do they do a lot of direct sales to end users? I looked at LinkedIn like you suggested and 8% of the Essendant employees have "sales" in their title versus 18.5% for Staples.
Assendent IS publically held
No govt approval needed. Sycamore is privately held.
If your competition doesn't have any supply or their purchase price is now 10% higher, how much easier does that make it for you as a salesperson to win business?
Hey @V7oawlY-mjm. Let's play a game. Go to Essendant's LinkedIn page and search for people with the term sales in their title. Come back and let us know what you find out.
Its not a done deal yet. Still needs to go through government approval.
Essendants focus is a wholesaler of products.
This just puts more light on the fact that Sycamore wants a model that does not require any significant outside salesforce.
If you are a SAL, AE, Director or Manager - lookout! The game will change and you will no longer be needed in the capacity that you know. 2.0 is going to change everything!