Business Combinations and Acquisition of Noncontrolling Interest

12 Months Ended

Feb. 02, 2013

Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest [Abstract]

Business Combination Disclosure [Text Block]

Business Combinations and Acquisition of Noncontrolling Interest

ASC Topic 805 Business Combinations requires that companies record acquisitions using the acquisition method of accounting. Accordingly, the purchase price is assigned to the tangible assets and liabilities and identifiable intangible assets acquired, based on their estimated fair values. The excess purchase price over the fair value is recorded as goodwill. Purchased intangibles with finite lives are amortized over their respective useful lives.

With the acquisition of Corporate Express in July 2008, the Company acquired more than 99% of the capital stock of Corporate Express and became approximately a 59% shareholder of Corporate Express Australia Limited ("Corporate Express Australia"), a public company traded on the Australian Securities Exchange. In September 2010, through a compulsory acquisition process, the Company acquired the final outstanding shares of Corporate Express Australia for cash consideration of AUD $5.60 per share, bringing the Company's ownership of this business to 100% for an aggregate purchase price of approximately AUD $407 million (approximately $361 million).

The Company also worked diligently to acquire the remaining capital stock of Corporate Express by means of a compulsory judicial "squeeze out" procedure in accordance with the Dutch Civil Code. However, in October 2011, after a long and cumbersome process, Staples withdrew the squeeze out proceedings. Subsequent to the withdrawal of these proceedings, the Company has paid an aggregate of €13.1 million (approximately $17.2 million) to acquire additional shares in Corporate Express through private transactions, bringing its current ownership to approximately 99.98%.

The purchases of the additional shares were accounted for in accordance with ASC Topic 810 Noncontrolling Interest in Consolidated Financial Statements as an equity transaction, by adjusting the carrying amount of the noncontrolling interest to reflect the change in the Company's ownership interest in Corporate Express and Corporate Express Australia. The purchase of the noncontrolling interest is reflected as a financing cash outflow in the consolidated statement of cash flows.

In July 2010, the Company entered the Finnish market, acquiring Oy Lindell AB ("Lindell"), a Finnish office products distributor. The aggregate cash purchase price was €31 million (approximately $39 million based on foreign exchange rates on the acquisition date), net of cash acquired. As a result of this acquisition, the Company recorded goodwill of $16.4 million and $4.3 million of intangible assets, which are being amortized on a straight line basis over their weighted-average estimated lives of 5 years. The goodwill and intangible assets were allocated to the International Operations segment. None of the goodwill is deductible for tax purposes.