Staples Sells Its Commercial Contracts And Assets To Essendant

Staples, Inc.SPLSOffice Depot IncODPannounced that it has agreed to sell more than $550 million in large corporate contract business and related assets to Essendant Inc ESND, a wholesale distributor of workplace essentials. More than 25 percent of the segment's revenue comes from contracts with Fortune 100 companies and approximately half of the revenue are derived by clients are Fortune 500 companies. As part of the agreement, Essendant will pay Staples approximately $22.5 million. However, the deal is contingent on the successful completion of Staples merger with Office Depot. Shares of Office Depot were higher by more than 3 percent following the announcement. Essendant said that it will invest approximately $100 million to support the new business. The company also added that the acquisition of the 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." Essendant's stock showed no trades early Wednesday morning.