Massachusetts-based Staples Inc., the parent company of Top 40 distributor Staples Promotional Products (asi/120601), may be up for sale and is reportedly in talks with private-equity bidders. The discussions follow Staples’ failed bid in 2016 to acquire rival Office Depot after a federal judge blocked the takeover attempt. The potential sale of Staples was first reported this morning by The Wall Street Journal.
Staples has a market value of about $5.65 billion, and analysts believe the firm could be purchased for upwards of $7 billion. Staples’ shares soared today after news of a possible sale broke.
The office supply company reported total 2016 sales of about $18.25 billion, but its retail business has struggled in recent years. Staples said comparable sales, which exclude the effects of new or closed stores, decreased 7% in Q4 in the U.S. and Canada. Then in March, Staples announced another 70 stores would close, following the closures of 48 North American stores last year. Staples also sold a majority stake in its European business to private-equity firm Cerberus Capital Management.
While Staples’ overall sales have been down, revenues at Staples Promotional Products have remained strong. Spurred by new technology and growth in markets like healthcare, Counselor estimates the firm generated $592 million in North American promotional product sales in 2016, a $38 million year-over-year rise.
Staples Inc. has not commented on the WSJ report.