Parent company of Office Depot to offload CompuCom unit for $305 million dollars
Office Depot Corp., the American office supplies retailer, has announced plans to split itself into two companies, marking a significant milestone in its strategic transformation. The move comes after over a year of review by its parent company, ODP Corp., and follows the sale of its CompuCom Systems IT unit to Variant Equity for $305 million.
The sale, which includes a mix of cash and an interest-bearing note, is intended to be the first step in a strategic transformation for Office Depot. The company originally acquired CompuCom for approximately $1 billion in 2017, but sales suffered during the pandemic, prompting a reevaluation of its business model.
The acquisition by Variant Equity represents a shift in Office Depot's focus from a traditional office products retailer to a broader business services and technology products platform. The other new company will comprise of the retail banners, while one of the new companies will house the business-to-business supply services.
ODP's Chief Financial Officer, Anthony Scaglione, stated that this action represents an important step in continuing to align the business model and resources towards the core strategy. Gerry Smith, CEO of Office Depot, echoed this sentiment, stating that technology is the office supply of the future.
The sale of CompuCom to Variant Equity comes as Office Depot is still being pursued by rival Staples. In November, Staples reiterated its interest in buying ODP's retail business for $1 billion. However, Office Depot is moving to prune, narrow, and divest after trying to transform into a broad, diverse B2B services company.
In December 2021, CompuCom Systems was acquired by the private equity fund Blackstone. The spin-off process is expected to be completed in the first half of this year, with ODP aiming to enhance its core focus and leverage its B2B assets and digital commerce platform to maximize returns for its shareholders.
Office Depot's strategic transformation is a response to the changing landscape of the office supply industry. As technology continues to play a larger role in the workplace, Office Depot is positioning itself to capitalize on this trend and provide comprehensive business services to its clients. The company's future looks bright as it embarks on this new chapter.
