Staples to acquire PNI Digital Media

Staples is in the process of acquiring PNI Digital Media, a leading innovator in digital media solutions for retailers, for CDN$1.70 per share, representing a net equity value of approximately CDN$73.9 million.

The purchase share price represents a premium of 31.8% over the closing price of CDN$1.29 of the PNI shares May 2 on the Toronto Stock Exchange and a premium of 28.9% over the 30 day volume weighted average price of the PNI shares on the TSX for the period ended May 2.

More than 30,000 retail locations are connected to the PNI Digital Media Platform, which enables retailers to sell millions of personalized products every year including photo prints, photo books, calendars, business cards, documents, wedding invitations and stationery.

"For years, our retailer partners have used our online, in-store kiosk software and mobile apps to successfully drive millions of orders and in-store visits," said Kyle Hall, CEO of PNI Digital Media. "With the support of Staples, we expect to significantly expand the services we offer for our retailers and partners."

"PNI's technology gives customers easy access to the best personalized products and related services." said Damien Leigh, SVP, Staples Business Services. "As a part of Staples, we expect PNI to continue to innovate on an open platform and share their innovations with both their current customers and with Staples' Business Services division."

According to Staples, PNI is expected to operate independently and to continue growing its customer base with Staples' support.

The transaction is subject to customary closing conditions, including approval by PNI shareholders and the approval of the Supreme Court of British Columbia. The special meeting of PNI shareholders to approve the arrangement will be held on or about July 8.

The definitive agreement for the transaction provides for, among other things, a non-solicitation covenant on the part of PNI, subject to customary fiduciary out provisions. The agreement also provides Staples with a right to match potential third party proposals received by PNI. PNI is permitted to terminate the agreement in certain circumstances, including to allow PNI to accept a superior proposal, subject to fulfilling certain conditions. Those conditions include the payment of customary termination fees in certain circumstances.

PNI shareholders owning approximately 17.8% of the issued and outstanding PNI shares, including all of the directors and executive officers of PNI and Invesco Canada Ltd., have entered into voting agreements with Staples to vote in favor of and support the plan of arrangement. The arrangement is expected to close in PNI's 2014 fiscal fourth quarter.



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