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Bain Capital mulls bid to buy Staples for the second time

14 Sep 2012

Bain Capital is understood to be among several private equity firms that are considering taking US office supply retailer Staples private, Fortune reported late Thursday, citing unnamed sources.

Talks are understood to be at an early stage, the report said, adding that the earliest an actual offer could come would be later on in the year.

The wait is thought to be because of financing, but also because of Bain Capital’s history with Staples after taking the business private under presidential candidate Mitt Romney’s tenure in 1986.

“Private equity firms don’t want the PR hassle associated with bidding for Mitt Romney’s signature business achievement before November 6,” the report said.

The company currently has a market capitalisation of nearly $8bn, which could value a potential deal at about $9.6bn assuming a 20 per cent premium, the report added.

Sources told Fortune that debt financing would be available for such a deal, “… although it might require participation by almost all of the largest Wall Street banks.”

Bain Capital gave $4.5m to two supermarket executives in 1986 to open an office supply supermarket in Brighton, Massachusetts, which grew rapidly into a chain and went public in 1989.

Bain Capital made an almost seven-times return on its initial investment in the business, and Romney sat on the company’s board of directors for over a decade.

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