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After carefully reviewing a report from Credit Suisse, Cramer crunched some numbers and drew a similar conclusion: the acquisition could do wonders for the business, as well as the stock.
If you're a shareholder, Cramer knows your knee-jerk reaction may be to shrink back in horror. Given the stock is down about 18 percent year-to-date, it would stand to reason that an acquisition of this magnitude would be the last thing you want to see. The cost would send shares tumbling, right?
Cramer says not so fast.
"First, both Staples and are already out there closing stores aggressively, " Cramer noted, with Office Depot expecting $100 million in synergies from their 400 stores closures.
However, Cramer says, "a combined Staples/Office Depot could close another 1,000 stores, racking up $300 million in synergies, or $300,000 per store."
And he said, add in the corporate overhead that could be reduced by a merger, as well as the consolidation of the two sales forces and the increased purchasing power of a larger chain, and all told, a merger could generate over $1 billion in total synergies for .
Taken a step further, Cramer says, "A billion dollars in synergies would represent a 50 percent increase to the combined entity's earnings before interest, taxes, depreciation and amortization in 2015, which, in turn, would translate into a 110 percent boost for Staples' earnings per share."
In other words, buying Office Depot should allow Staples to more than double its earnings power.
If Cramer's analysis seems too good to be true, he wants you to know his theory is more than hypothetical. "Since Office Depot acquired Office Max two year ago, the merger created $700 million in synergies. "In fact, the synergies from this merger were more than six times greater than the combined earnings of the two chains before the deal. That's huge."
And although Staples tried to buy Office Depot in 1997 but was ultimately blocked by the Federal Trade Commission, Cramer says a lot has changed since then with Target, Wal-Mart, and Amazon selling similar merchandise. Therefore, he doesn't think a merger presents the same issue.
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All told, Cramer thinks a merger would be a win-win. And according to Credit Susise, "Staples could pay an 80 percent premium for Office Depot and still make a killing. Given how well Office Depot has done since acquiring Office Max, I think this deal makes enormous sense," Cramer said.
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