Staples details $5.2 billion debt commitment for buyout by Sycamore

By Sara Rosenberg

New York, July 6 – Staples Inc. has received a commitment for $3.6 billion of credit facilities and a $1.6 billion unsecured bridge loan to help fund its acquisition by Sycamore Partners, according to a market source.

The facilities consist of a $2.4 billion term loan and a $1.2 billion ABL facility, the source said.

UBS Investment Bank, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets, Jefferies LLC, Wells Fargo Securities LLC and Fifth Third Bank are leading the debt, with UBS the left lead on the term loan, Wells Fargo the left lead on the ABL and Bank of America the left lead on the bridge loan.

Under the agreement, Staples is being bought for $10.25 per share in cash per share of common stock. The transaction is valued at about $6.9 billion.

With the acquisition, there will be an internal reorganization under which the U.S. Retail, Canadian Retail, and North American Delivery business will be separated into standalone entities.

The debt financing is for the North American Delivery business, which will have pro forma leverage of around 4 times, the source added.

Closing is expected no later than December, subject to customary conditions, including the receipt of regulatory and stockholder approval. The transaction is not subject to a financing condition.

Staples is a Framingham, Mass.-based retailer of office supplies.

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