Sycamore Partners has reached the advanced stages of negotiations to buy Staples (NASDAQ: SPLS) in a deal that could exceed $6 billion, according to Reuters, with an announcement perhaps coming as soon as next week.
The struggling office supplies retailer had been up for auction after its proposed $6.3 billion merger with Office Depot was shot down due to antitrust concerns last year. Reports had indicated that Cerberus Capital Management was in position to buy the Massachusetts-based chain, but Staples turned down an offer in late May that reportedly valued the company at more than $5.8 billion.
Sycamore has a long history in the retail sector; it bought department store chain Belk for about $3 billion in 2015 and has invested in discount store Dollar Express and teen clothing retailer Hot Topic, among other brands. On a broader level, PE investments in the retail sector have made up just 1.66% of all PE deals in the US since the start of 2014, according to the PitchBook Platform, as companies struggle to cope with the rise of online retailers like Amazon.