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Staples to Acquire Medical Arts Press For $385 Million; Acquisition to Strengthen Quill's Vertical Market Offering
FRAMINGHAM, Mass., Jul 9, 2002 (BUSINESS WIRE) -- Staples, Inc. (Nasdaq: SPLS) announced today a definitive agreement to purchase Medical Arts Press, Inc. Staples will purchase Medical Arts Press for $385 million in an all cash transaction. The transaction is expected to be completed during the summer.

"Expanding Staples' offering in vertical markets will build our relationships with new and existing customers, growing our industry-leading delivery business," said Ron Sargent, Staples President and Chief Executive Officer. "The acquisition of Medical Arts Press builds on our expertise serving key industries including the medical profession, the largest vertical market in the U.S."

Staples expects the purchase to be neutral to slightly accretive to earnings in 2002, and accretive to earnings in 2003 by $0.01 to $0.02 per share.

Based in Minneapolis, Medical Arts Press recorded approximately $168 million in revenues in 2001. Founded in 1950, the company is a leading direct marketer of specialized printed office products and practice-related supplies to healthcare practices and currently serves more than 300,000 customers. It also operates SmileMakers, the largest direct marketer of children's giveaway items catering to medical, dental and educational markets, and Hayes Marketing, Inc., (HMI), a direct marketer and manufacturer of marketing-related products to chiropractors, dentists and eye care professionals.

"Joining the Staples' family will make it easier for our customers to obtain everything they need to run their practices," said Steven Wexler, Chief Executive Officer of Medical Arts Press. "We will continue to deliver on our commitment to provide superior service and quality products. Our customers will benefit from synergies with Staples' infrastructure, access new points of distribution and utilize Quill's expertise working with healthcare professionals."

Medical Arts Press will continue to operate under its own name and become part of Staples' North American Delivery business. Steven Wexler will remain with the company and report to Larry Morse, President of Quill. Medical Arts Press will maintain its headquarters and facilities.

Staples will host a live Internet broadcast of a conference call today at 10:00 a.m. Eastern discussing details of this acquisition. Individuals may access the broadcast from Staples' Web site directly at http://investor.staples.com. A replay of the conference call will be available at http://investor.staples.com from 1:30 p.m. Eastern on July 9, through midnight on Tuesday, July 16.

About Staples

Staples, Inc. is an $11 billion retailer of office supplies, business services, furniture and technology to consumers and businesses from home-based businesses to Fortune 500 companies in the United States, Canada, the United Kingdom, Germany, the Netherlands and Portugal. Headquartered outside Boston, Staples invented the office superstore concept and today is the largest operator of office superstores in the world. The company has approximately 53,000 associates serving customers through more than 1,400 office superstores, mail order catalogs, e-commerce and a contract business. More information about the company is available at http://www.staples.com.

Certain information contained in this news release constitutes forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of risks and uncertainties, including but not limited to: Staples' market is highly competitive and Staples may not continue to compete successfully; Staples may be unable to continue to successfully open new stores; Staples' new Dover format store may not be successful; Staples' quarterly operating results are subject to significant fluctuation impacted by the extent to which sales in new stores result in the loss of sales in existing stores, the mix of products sold, pricing actions of competitors, the level of advertising and promotional expenses and seasonality; Staples' operating results may be impacted by changes and uncertainty in the economy; Staples' stock price may fluctuate based on market expectations; Staples' growth may continue to strain operations; Staples' European operations may not become profitable; Staples' International operations expose Staples to the unique risks inherent in foreign operations; Staples may be unable to obtain adequate future financing; and those factors discussed in Staples' Annual Report on Form 10-K for the year ending February 2, 2002, which is on file with the Securities and Exchange Commission. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

CONTACT:

Staples, Inc.
Investor Contact:
Laurel Lefebvre, 508-253-4080
Director, Investor Relations
or
Media Contact:
Deborah Hohler, 508-253-8509
Public Relations Manager

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Staples, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.