Dive Brief:
- With unanimous board approval, The ODP Corporation has entered into an agreement to be bought by an affiliate of Atlas Holdings for $28 per share in cash, per a Monday press release. The deal is expected to close by the end of 2025, pending regulatory and shareholder approvals.
- Putting the company valuation at about $1 billion, the purchase represents a premium of 34% to ODP’s closing share price on Friday. Atlas Holdings is a private equity group founded in 2002 with investments in sectors such as building materials, construction services, packaging, paper and more.
- After the deal is concluded, ODP will become a privately held company and no longer trade stock on public markets.
Dive Insight:
Years after a previous exploration into selling the business, the owner of Office Depot and OfficeMax is now planning to go private.
“This transaction, fully supported by our Board, provides a substantial premium for The ODP Corporation’s shareholders and will improve the company’s position for the next phase of growth,” ODP’s Chief Executive Officer Gerry Smith said in a statement. “Atlas brings an understanding of our industry, along with the operational expertise, resources and track record of supporting its companies that will fast forward our B2B growth initiatives and strengthen our position as a trusted partner to our customers. Atlas’ commitment demonstrates their confidence in our future and the strong momentum we’ve achieved through our focus on operational excellence and disciplined execution.”
ODP in 2022 announced it would keep itself as-is, despite spending more than a year exploring sale options that included the potential spinoff of its retail arm. At the time, the company ended its discussions to separate the business citing macroeconomic conditions.
Now, the company will join a private equity firm with a broad portfolio of investments.
ODP itself is focused on its B2B businesses, which include ODP Business Solutions (a seller of supplies to businesses) and Veyer (a distribution logistics service provider).
The corporation’s second quarter earnings released in August showed total reported sales dropped 7.6% year over year to $1.6 billion, which was driven in part by lower sales in the Office Depot Division. That was caused by having 60 fewer retail stores compared to the year before, as well as a decline in consumer traffic more generally to both stores and its website.