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Office supplier Staples. Photo: Justin Sullivan/Getty Images

Sycamore Partners is prepping a $1 billion dividend recap for Staples, which would let it recoup around two-thirds of the equity used to buy the office supplies company 16 months ago.

Why it matters: Because this sort of myopic greed gives ammunition to private equity's critics.

  • For the uninitiated: Dividend recaps are a mechanism whereby private equity-owned companies issue new debt, and then hand proceeds over to the private equity firm (as opposed to using it to grow the business). Sometimes they don't matter too much. Sometimes they form leveraged anchors around a company's neck.

The bottom line: "The recapitalization and any [subsequent] IPO would be focused on the division of Staples that sells anything from pens to office chairs to large corporate clients, which Sycamore carved out of the chain’s retail operations at the time of the LBO. The transaction will increase Staples’ debt load to $5.325 billion from around $4.25 billion... equivalent to around 4.7 times adjusted EBITDA." — Davide Scigliuzzo & Eliza Ronalds-Hannon, Bloomberg.

Go deeper

Trump set to appear at Pennsylvania GOP hearing on voter fraud claims

President Trumpat the White House on Tuesday. Photo: Chip Somodevilla/Getty Images

President Trump is due to join his personal lawyer Rudy Giuliani in Gettysburg, Pennsylvania, Wednesday at a Republican-led state Senate Majority Policy Committee hearing to discuss alleged election irregularities.

Why it matters: This would be his first trip outside of the DMV since Election Day and comes shortly after GSA ascertained the results, formally signing off on a transition to President-elect Biden.

Scoop: Trump tells confidants he plans to pardon Michael Flynn

Photo: Alex Wroblewski/Getty Images

President Trump has told confidants he plans to pardon his former national security adviser Michael Flynn, who pleaded guilty in December 2017 to lying to the FBI about his Russian contacts, two sources with direct knowledge of the discussions tell Axios.

Behind the scenes: Sources with direct knowledge of the discussions said Flynn will be part of a series of pardons that Trump issues between now and when he leaves office.

Erica Pandey, author of @Work
10 hours ago - World

Remote work shakes up geopolitics

Illustration: Eniola Odetunde/Axios

The global adoption of remote work may leave the rising powers in the East behind.

The big picture: Despite India's and China's economic might, these countries have far fewer remote jobs than the U.S. or Europe. That's affecting the emerging economies' resilience amid the pandemic.