Corporate Express, Lyreco Reveal Merger Plans
May 21, 2008
Corporate Express NV and Lyreco SAS announced that they entered into a transaction, subject to shareholders’ approval, to combine both companies to create a leading global office products supplier focused purely on the business to business (B2B) market. The combination will benefit from a shared vision on industry and strategy, major economies of scale, a well-balanced international presence and customer mix.
Compelling industrial and strategic rationale- The number one B2B player in Europe, North America and Asia-Pacific with € 7.8 billion of combined sales
- Enhanced opportunities to grow top-line and profitability based upon complementary geographic reach, expanded customer base, IT platform and best-in-class customer service
- Experienced management with strong track record: Eric Bigeard to become CEO, Peter Ventress COO and Floris Waller CFO
- Acceleration of the execution of Corporate Express’ strategic development
Substantial value creation and clear benefits for all stakeholders- Significant synergies, reaching run-rate of at least € 100 million in third year
- EPS accretive from year one onwards
- Original sales and margin guidance for Corporate Express increased:
- Combined 2008E sales € 8.0-8.2 billion and combined 2008E EBITDAe² margin of 6.5-6.8%
- Combined 2011E sales € 9.5-10.0 billion and combined 2011E EBITDAe margin of 9% (including € 100 million in synergies)
Transaction highlights- Corporate Express to acquire 100% of Lyreco valuing Lyreco at € 1,731 million³ or 9.6x 2007 EBITDAe of € 181 million. Including run-rate synergies the transaction multiple reduces to 6.2x
- The consideration paid to Lyreco shareholders will be 102.5 million new ordinary shares (29.9% of the total outstanding capital), € 560 million of cash and € 340 million as a vendor loan note
- Fully committed financing in place
- Corporate Express’ shareholders’ approval will be requested at an Extraordinary General Meeting of its shareholders. Lyreco shareholders have approved the transaction
Peter Ventress, CEO of Corporate Express “This is the most logical and compelling merger one could envision in our industry. The two businesses are highly complementary. We will have an excellent geographic and customer balance and valuable market leading positions, while remaining fully focused on B2B customers. This merger accelerates our stated strategic development.
Staples considering options
In light of the news about the proposed Corporate Express N.V. acquisition of
Lyreco SAS, Staples, Inc.(Nasdaq: SPLS) and Staples Acquisition B.V.
are considering all options.
Staples Acquisition reaffirms that its all cash offer of EUR 8.00
per ordinary share delivers certain, immediate and superior value to
Corporate Express shareholders. Staples Acquisition's offer does so
without the substantial execution and other risks inherent in
Corporate Express' long-term plans, with or without the addition of
Lyreco.
Staples Acquisition launched its tender offer on May 19, 2008. The
acceptance period for the tender offer ends June 27, 2008.
The Boards of both companies are unanimous in their view that this combination and the associated synergies will provide an outstanding opportunity to create significant value for our shareholders, clients and employees. Lyreco’s management has an impressive track record, built on a proven business model, which has delivered impressive growth. This is an excellent and value creating deal.”
Eric Bigeard, CEO of Lyreco
“The combination of Corporate Express and Lyreco will create a formidable player in our market. We share a vision on the industry and strategic direction. The natural fit of the two companies will create a strong global platform to further grow our business, backed by the commitment of the management teams and the support from the employees of both companies.
This merger marks a significant milestone for Corporate Express and Lyreco and for the industry as a whole and both management teams strongly support it. I am delighted to be working with Peter Ventress and his team and believe the combined group will benefit from a wealth of experience.”
