ODP Company Announces Sale of CompuCom Subsidiary in $ 305 Million Transaction


BOCA RATON, Florida – (COMMERCIAL THREAD) – The ODP Corporation (NASDAQ: ODP), a leading provider of business services, products and technology solutions for the digital workplace through an integrated B2B distribution platform, today announced having sold its subsidiary CompuCom Systems to a subsidiary of Variant Equity in a transaction valued at up to $ 305 million.

“This action represents an important step in continuing to align our business model and resources with our core strategy,” said Anthony Scaglione, CFO of The ODP Corporation. “By strengthening our primary focus and leveraging our B2B assets and our digital commerce platform, we are in an excellent position to maximize returns for our shareholders. ”

Consideration for the transaction of up to $ 305 million consists of a combination of cash, an interest-bearing promissory note and a potential earn-out. The company’s board of directors continues to assess its future capital allocation plans and use of the proceeds, and today announced that it is authorizing a $ 200 million increase in its repurchase plan. ‘existing shares of $ 450 million to $ 650 million. The Company continues to implement its previously announced $ 150 million Accelerated Share Buy-Back Plan (ASR), which, combined with previous purchases, will result in the return of over $ 300 million of capital to shareholders in 2021. The Company will review the pace and method of the ASR share buyback plan, which is expected in the first half of 2022. With the increased authorization, the Company will have approximately $ 342 million available for buybacks. additional actions until June 30, 2022 after the completion of the ASR plan. The share buyback program can be modified, extended, suspended or interrupted at any time.

“CompuCom has a long history of providing excellent technology support and services to its large, blue-chip customer base,” said Farhaad Wadia, Managing Partner of Variant Equity. “We are thrilled with this opportunity to partner with the CompuCom team and build on the company’s rich history of innovation. ”

“We are delighted to take this important step for our future and the increase in our share buyback authorization. We look forward to providing further details on our year-end earnings conference call, ”added Scaglione.

Goldman Sachs & Co. LLC acted as exclusive financial advisor to ODP, and Simpson Thacher & Bartlett LLP acted as advisor to ODP in this transaction.

About ODP Company

The ODP Corporation (NASDAQ: ODP) is a leading provider of business services and supplies, digital workplace technology products and solutions to small, midsize, and businesses, through an enterprise integrated distribution platform to business (B2B), which includes world-class supply chain and distribution operations, dedicated sales professionals and technicians, an online presence and approximately 1,100 stores. Through its Office Depot®, OfficeMax® and Grand & Toy® banners, as well as others, the Company provides its customers with the tools and resources they need to focus on their passion to start, grow and manage their business. business. For more information visit news.theodpcorp.com and investor.theodpcorp.com.

About the equity of variants

Founded in 2017, Variant Equity is a Los Angeles-based private equity firm that makes controlling investments in business divestitures and transactions of similar operational intensity across a range of industries, including transportation and logistics. , technology and business services. The company’s investment approach focuses on companies that it believes are best suited to reach their full potential as stand-alone businesses through the deployment of Variant’s operations and technology resources. For more information, please visit www.variantequity.com.

The ODP Corporation and Office Depot are trademarks of The Office Club, Inc. OfficeMax is a trademark of OMX, Inc. CompuCom is a trademark of CompuCom Systems, Inc. Grand & Toy is a trademark of Grand & Toy, LLC in Canada. © 2021 Office Depot, LLC. All rights reserved. All other product or company names mentioned in this document are trademarks of their respective owners.

FORWARD-LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss objectives, intentions and expectations regarding trends, plans, events, results of operations, cash flows or future financial situation. , the potential impacts on our business due to the unknown severity and duration of the COVID-19 pandemic, or indicate other information relating, among others, to the Company, based on current beliefs and assumptions made by , and information currently available for, management. Forward-looking statements will generally be accompanied by words such as “anticipate”, “believe”, “plan”, “could”, “estimate”, “expect”, “foresee”, “direction”, “prospect”, ” intend “,” may “,” possible “,” potential “,” predict “,” project “,” propose “or other similar words, phrases or expressions, or other variations of these words. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the control of the Company. There can be no assurance that the Company will achieve these expectations or that these beliefs will prove to be correct, and therefore, investors and stakeholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those of forward-looking statements include, among others, the highly competitive market for office products and the inability to differentiate the Company from other resellers of office supplies or to respond to declining general sales of office supplies or changing consumer demands; competitive pressures on the Company’s sales and pricing; the negative effects of an unsolicited takeover bid on our business, results of operations or financial condition; the risk that the Company will not be able to transform the business into a service-oriented B2B platform that such a strategy does not yield the expected benefits; the risk that the Company will not be able to achieve its strategic plans, including the proposed separation of its consumer activities, and the high costs associated with these transactions may not be recovered if these transactions are not completed; the risk that the Company may not be able to realize the anticipated benefits of acquisitions due to unforeseen liabilities, capital expenditures, expenses, future indebtedness and the unforeseen loss of key customers or the inability to realize expected revenues, synergies, cost savings or financial performance; the risk that the Company will not be able to successfully maintain a relevant omnichannel experience for its customers; the risk that the Company will not be able to execute the Maximize B2B restructuring plan successfully or that such plan will not yield the expected benefits; the inability to effectively manage the Company’s real estate portfolio; loss of business with government entities, purchasing consortia, and sole-source or limited-source distribution agreements; the inability to attract and retain qualified personnel, including employees in stores, service centers, distribution centers, field and corporate offices and senior management, and the inability to maintain the ‘supply of skills and resources in balance with customer demand; failure to execute effective advertising efforts and to maintain the Company’s reputation and brand at a high standard; disruptions to computer systems, including the provision of technological services; violation of computer systems affecting reputation, relationships and operations with business partners and customers and resulting in high costs and loss of revenue; unforeseen slowdowns in business relationships with customers or conditions with suppliers, third party vendors and business partners; disruption of global sourcing activities, evolving foreign trade policy (including tariffs imposed on some products manufactured abroad); Office Depot branded products are subject to additional product, supply chain and legal risks; concerns about the safety and quality of manufacturers’ branded products and services and Office Depot’s private label products; covenants on the credit facility; general disruption of credit markets; the appearance of significant depreciation charges; retained responsibility for the liabilities of acquired companies; fluctuation in quarterly operating results due to the seasonality of the Company’s activities; changes in tax laws in the jurisdictions in which the Company operates; wage and benefit cost increases and changes in labor regulations; changes in the regulatory environment, legal compliance risks, and violations of the US Foreign Corrupt Practices Act and other global anti-corruption laws; the volatility of the price of the Company’s common shares; changes or elimination of the payment of cash dividends on the Company’s ordinary shares; macroeconomic conditions such as future declines in business or consumer spending; increases in the prices of fuel and other commodities and the cost of materials, energy and other production costs, or unforeseen costs that cannot be recouped in product pricing; unforeseen claims, charges, litigation, dispute resolution or settlement costs; catastrophic events, including the impact of weather events on the business of the Company; discouragement of legal actions by shareholders against the Company and its directors and officers due to the exclusive forum selection of the Court of Chancery, the Federal District Court for the District of Delaware or other state courts of Delaware by the Company as the sole and exclusive forum for such proceedings; and the impact of the COVID-19 pandemic on the Company’s business, including demand for its products and services and those of our customers, on trade and transportation restrictions and generally on our ability to manage effectively the impacts of the COVID-19 pandemic on our business operations. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the above factors and other risks and uncertainties described in the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the US Securities and Exchange. Commission. The Company assumes no obligation to update or revise any forward-looking statement.


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