DEERFIELD, Ill., Feb. 16, 2016 /PRNewswire/ -- Essendant Inc. (NASDAQ: ESND), a leading supplier of workplace essentials, today announced an agreement to purchase from Staples, Inc. (NASDAQ: SPLS) contracts with minority and woman-owned office supply resellers and their large corporate and other enterprise customers representing sales of more than $550 million annually. The transaction is subject to the successful completion of the proposed merger of Staples and Office Depot, Inc., as well as other regulatory and customary closing conditions. Under the terms of the agreement, Essendant will pay Staples approximately $22.5 million.
These commercial contracts with large corporate and other customers, often referred to as enterprise accounts, are currently serviced primarily by the resellers with Staples and Office Depot, Inc. (NASDAQ: ODP) acting as a wholesaler. If completed, the acquisition of these contracts and related assets would significantly increase Essendant's presence with enterprise accounts and enable independent dealers in combination with Essendant to effectively compete for their business nationally.
In the first year following closing, Essendant anticipates minimal impact to earnings per share due to transition costs and expects to make further investments in working capital of approximately $100 million to support the business.
The Federal Trade Commission has challenged Staples' acquisition of Office Depot on antitrust grounds. A U.S. district court hearing is scheduled to begin in March 2016 on the FTC's petition for a preliminary injunction prohibiting the consummation of the merger until completion of a trial before an FTC administrative law judge.
Forward-Looking Statements Statements in this news release regarding the proposed transaction between Essendant and Staples, the future financial impact of the proposed transaction, the proposed transaction's effect on the ability of Essendant and its independent dealers to compete for enterprise accounts, and any other statements about Essendant's future plans, capabilities, expectations, beliefs, goals or prospects constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing "plans," "believes," "anticipates," "expects," "will," "would," "scheduled to," "subject to" and similar expressions) should also be considered forward looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including: the risk that the conditions to the proposed transaction between Essendant and Staples are not satisfied; potential adverse reaction or changes to business or employee relationships, including those resulting from the announcement of the proposed transaction; timing of the transaction; competitive responses to the proposed transaction; unexpected costs or charges resulting from the transaction; the risk that covenants of Staples are not performed timely; and the other factors described in Essendant's annual Report on From 10-K for the year ended December 31, 2014.
Shareholders, potential investors and other readers are urged to consider these risks and uncertainties in evaluating forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. For additional information about risks and uncertainties that could materially affect Essendant's results, please see the company's Securities and Exchange Commission filings. The forward-looking information in this news release is made as of this date only, and the company does not undertake to update any forward-looking statement. Investors are advised to consult any further disclosure by Essendant regarding the matters discussed in this release in its filings with the Securities and Exchange Commission and in other written statements it makes from time to time. It is not possible to anticipate or foresee all risks and uncertainties, and investors should not consider any list of risks and uncertainties to be exhaustive or complete.
Company Overview Essendant Inc. is a leading supplier of workplace essentials, with 2014 net sales of $5.3 billion. The company stocks a broad assortment of over 160,000 items, including technology products, traditional office products, janitorial and breakroom supplies, office furniture, industrial supplies, and automotive aftermarket tools. The company's network of 74 distribution centers enables the company to ship most products overnight to more than ninety percent of the U.S. and major cities in Canada. For more information, visit www.essendant.com.
Essendant common stock trades on the NASDAQ Global Select Market under the symbol ESND.
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SOURCE Essendant Inc.