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Staples attaching Quill Corp.
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April 7, 1998: 9:16 a.m. ET
Office supply chain buying private mail-order rival for $685 million
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NEW YORK (CNNfn) - Ever on a merger tack, Staples Inc. said Tuesday it will buy rival office supplies vendor Quill Corp. for $685 million in stock.
Westborough, Mass.-based Staples, whose proposed $4 billion merger last year with top rival Office Depot Inc. was called off by a federal judge for antitrust reasons, said it will issue about 30 million shares to acquire privately held Quill.
Staples said the deal for Lincolnshire, Ill.-based Quill, the nation's largest independent mail-order office supply vendor, is expected to be completed by this summer.
Staples expects to take a $32 million charge to pay for the deal, but the buyout will add 1 cent per share to earnings in fiscal 1998 and 2 cents in fiscal 1999.
According to the consensus analysts' estimate as compiled by First Call, Staples is expected to earn 57 cents per share in fiscal 1998 and 74 cents a share in fiscal 1999.
Shares of Staples (SPLS) lost 1-5/32 to 22 3/16 in Nasdaq trading Monday.
The purchase price includes $580 million for ongoing operations and $105 million for cash in excess of operating cash and real estate owned by the principals.
As part of the deal, Quill will maintain its name brand identity and its business will be separate from Staples' mail-order operations.
"Staples' and Quill's direct marketing operations are complementary," said Thomas G. Stemberg, chairman and chief executive officer of Staples. "Quill's highly developed direct marketing skills will enhance Staples' ability to address the delivered office products market.''
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Staples
Quill
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