Parent Company of Office Depot to be Acquired by Private-Equity Firm

The ODP Corporation, which is the parent company of office-supply chains Office Depot and Office Max, today announced that it’s entered into a definitive agreement to be acquired by an affiliate of private-equity company Atlas Holdings, for approximately $1 billion in cash, or $28 per share, which is 34 percent higher than ODP’s share price on September 19th.. 

Once acquired, the ODP Corporation will become a privately held company, and shares of common stock will no longer be listed on the NASDAQ stock exchange.

Rival Staples, which was also acquired by a private-equity firm (Sycamore Partners), had tried three times to acquire ODP, but failed.

Ironically, in 2013, Office Depot acquired rival OfficeMax at about the same price ($1.17 billion). It then began closing thousands of stores, which it says had been underperforming. 

The office-supplies business has been struggling for some time now. According to IBISWorld, revenue has fallen at a compounded annual rate of 4 percent over the past five years, totaling an estimated $20.9 billion in 2025.

The ODP Board of Directors unanimously approved the transaction, which is expected to be completed by the end of 2025. The deal is subject to customary closing conditions, including regulatory approvals and approval by The ODP Corporation shareholders.

“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,” commented ODP CEO Gerry P. Smith.

“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,” Smith said.

“Atlas has a long history of transitioning public companies into successful private enterprises and we are uniquely positioned to do just that with The ODP Corporation – an iconic American company,” commented Atlas Managing Partner Michael Sher.

“Atlas operates like a diversified holding company, and we have a proven record of delivering the human and financial capital necessary to create long-term value in our businesses. The ODP Corporation’s leadership has already taken several steps to mitigate the challenging retail environment, and we are the right partners to support The ODP Corporation’s continued evolution in its next chapter,” Sher said.