Staples acquisition boosts delivery business
NEW YORK --Office-supply retailer Staples Inc.'s acquisition of Dutch office supply retailer Corporate Express will put its North American delivery business on par with the size of its retail business, an executive said on Wednesday.
Staples Chief Operating Officer Mike Miles made the comments, which were webcast, at the PiperJaffray consumer conference in New York.
Early Wednesday, Staples said Corporate Express NV accepted its buyout offer of about $2.7 billion -- a bid which the Framingham, Mass.-based company raised three times in a dogged effort to seal the deal. The takeover is expected to close in July.
Staples North American retail business now has about $10 billion in sales annually, and its North American delivery business -- which includes contracts with businesses as well as catalog and web site orders -- now has about $6.6 billion in sales. Corporate Express makes about $4 billion in North America delivery sales annually.
Staples is the world's largest seller of office supplies due to its strength as a retailer in the U.S. market. Corporate Express is the largest distributor, selling only to companies.
"When the deal is done, we will be as big a player in delivery as we are in the retail space in North America," Miles said.
Miles said the deal will help Staples by establishing a contract business in Europe and Canada and integrating vendor agreements, sales forces and logistics such as delivery services. The company also plans to save on general and administrative expenses, Miles said.
He said integration will take about three years, and said consolidating distribution and sales forces will take longer than other areas.
Shares of Staples rose $1.02, or 4.5 percent, to $24.18 during midday trading. 