Staples to be acquired by Sycamore Partners

Staples will be purchased by Sycamore Partners for about $6.9 billion in one of the largest retail deals of the year - a wager that the office-supply chain is better off continuing its turnaround plan as a private company.

Sycamore, saying it was attracted to Staples's 'iconic brand,” is paying $10.25 a share for the retailer, according to a statement on Wednesday.

The deal gets Staples out of Wall Street's limelight and lets it focus on a turnaround plan that includes reducing its retail footprint. But it's hard to tell how the buyout will fix its fundamental challenges, including the rapid shift of customers to Amazon.com and slackening demand for traditional office supplies.

'This doesn't change the industry dynamics or the pressures the retailer faces,” said Seema Shah, an analyst at Bloomberg Intelligence.

The deal caps more than a year of turmoil for Staples, which was thwarted in an attempt to make its own acquisition in May 2016. The company had tried to purchase Office Depot Inc. in a $6.3 billion deal that would have unified the two largest office-supply sellers, but the transaction was opposed by antitrust regulators.

After its bid for Office Depot failed, Staples CEO Ron Sargent stepped down and the company scrambled for a Plan B.

Under new CEO Shira Goodman, Staples closed stores and sought to recast itself as a source of business services. Last month, it overhauled its marketing to pivot away from its roots - selling low-priced office supplies at big stores. Its new TV ads don't show stores, instead focusing on office managers at work.

But sales continued to decline at the company, which began discussing buyout possibilities with private equity firms. Bloomberg reported in May that Staples had rejected a takeover offer from Cerberus Capital Management because it was too low. That left Sycamore in the lead to acquire the retail chain.

The first Staples store was opened by former supermarket executive Tom Stemberg in Brighton, Mass., in 1986. According to company lore, he was inspired to start the retailer because his typewriter ribbon broke over Fourth of July weekend and he couldn't find a replacement.

The company, now based in Framingham, Massachusetts, expanded quickly in the 1990s and early 2000s using a tagline 'That was easy.” But the digital revolution took a toll on the chain. E-commerce sales hurt brick-and-mortar demand, and many businesses are using less paper, ink and other supplies.