Staples 2014 Annual Report Download - page 101

STAPLES 7
iFORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K and, in particular, the
description of our Business set forth in Item 1 and our
Management’s Discussion and Analysis of Financial Condition
and Results of Operations set forth in Appendix B (“MD&A”)
contain or incorporate a number of forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934
(“the Exchange Act”).
Any statements contained in or incorporated by reference into
this report that are not statements of historical fact should
be considered forward-looking statements. You can identify
these forward-looking statements by use of the words like
“believes,” “expects,” “anticipates,” “plans,” “may,” “will,”
“would,” “intends,” “estimates” and other similar expressions,
whether in the negative or affirmative. These forward-looking
statements are based on current expectations, estimates,
forecasts and projections about the industry and markets in
which we operate and management’s beliefs and assumptions
and should be read in conjunction with our MD&A, our
consolidated financial statements and notes to consolidated
financial statements included in Appendix C. We cannot
guarantee that we actually will achieve the plans, intentions
or expectations disclosed in the forward-looking statements
made. There are a number of important risks and uncertainties
that could cause our actual results to differ materially from
those indicated by such forward-looking statements. These
risks and uncertainties include, without limitation, those set
forth below under the heading “Risk Factors” as well as risks
that emerge from time to time that are not possible for us to
predict. Forward-looking statements, like all statements in this
report, speak only as of the date of this report (unless another
date is indicated). We disclaim any obligation to update
publicly any forward-looking statements whether as a result of
new information, future events or otherwise.
ITEM 1A. RISK FACTORS
Risks Related to the Acquisition of Office Depot
Completion of the merger is subject to conditions and if
these conditions are not satisfied or waived, the merger
will not be completed.
On February 4, 2015, we announced that we had entered
into a definitive agreement to acquire Office Depot, a global
supplier of office products, services and solutions for the
workplace. Our obligations to complete the merger are subject
to the satisfaction or waiver of certain conditions, including
without limitation:
• expiration or earlier termination of any waiting period (and
any extension thereof), and receipt of any approvals,
consents or clearances under the HSR Act and other
specified antitrust laws; and
• approval by Office Depot shareholders.
The failure to satisfy all of the required conditions could delay
the completion of the merger for a significant period of time or
prevent it from occurring. Any delay in completing the merger
could cause us to not realize some or all of the benefits that
we expect to achieve if the merger is successfully completed
within its expected timeframe.
If we are unable to complete the proposed acquisition, we may
have incurred substantial expenses and diverted significant
management time and resources from our ongoing business. In
addition, the Company would be required to pay Office Depot
a termination fee of $250 million under certain circumstances,
including if the Merger Agreement is terminated as a result
of the antitrust closing conditions (as set forth in the Merger
Agreement) not being satisfied on or before November 4,
2015 (which date will be automatically extended to February 4,
2016 if all other closing conditions would otherwise have been
satisfied). In addition, Office Depot may be required to pay
the Company a termination fee of $185 million under certain
circumstances, including if Office Depot terminates the Merger
Agreement to accept a superior proposal.
There can be no assurance that the conditions to the closing
of the merger will be satisfied or waived or that the merger will
be completed.
Combining the two companies may be more difficult,
costly or time consuming than expected and the
anticipated benefits and cost savings of the merger may
not be realized.
We are operating and, until the completion of the merger,
will continue to operate, independently of Office Depot. The
success of the merger, including anticipated benefits and cost
savings, will depend, in part, on our ability to successfully
combine and integrate the businesses. It is possible that the
pendency of the merger and/or the integration process could
result in the loss of key employees, higher than expected
costs, diversion of management attention, the disruption of our
ongoing businesses or inconsistencies in standards, controls,
procedures and policies that adversely affect the combined
company’s ability to maintain relationships with customers,
vendors and employees or to achieve the anticipated benefits
and cost savings of the merger.
We will incur transaction fees, including legal, regulatory and
other costs associated with closing the transaction, as well as
expenses related to formulating and implementing integration
plans, including facilities and systems consolidation costs
and employment-related costs. We continue to assess the
magnitude of these costs, and additional unanticipated
costs may be incurred in the merger and the integration of
the two companies’ businesses. Although we expect that the
elimination of duplicative costs, as well as the realization of
other efficiencies related to the integration of the businesses,
should allow us to offset integration-related costs over time,
this net benefit may not be achieved in the near term, or at
all. As part of the integration process we may also attempt to
divest certain assets of the combined company, which may not
be possible on favorable terms, or at all, or if successful, may
change the profile of the combined company. If we experience