Office Depot Delays Corporate SeparationJanuary 19, 2022
The board of directors for ODP Corp., parent company of Office Depot, has agreed to delay the previously announced public company separation.
In May 2021, the ODP board unanimously approved a plan to separate the organization into two independent, publicly-traded companies by means of a tax-free spin-off to company shareholders. In November of last year, USR Parent, Inc., the parent company of Staples Inc. and a portfolio company of Sycamore Partners, reaffirmed its nonbinding proposal to acquire the ODP’s consumer business, including the Office Depot and OfficeMax retail stores business, the company’s direct channel business (officedepot.com), and the Office Depot and OfficeMax intellectual property, including all brand names, for US$1 billion in cash. ODP currently remains in conversation with Sycamore as it further evaluates the potential value and regulatory risk of Sycamore’s proposed transaction. In addition, ODP received a nonbinding proposal in December 2021 from another third party to acquire the company’s consumer business. The terms of that proposal are confidential.
According to ODP, the board of directors is currently reviewing both proposals. While a company separation was originally slated to take place in the first half of 2022, the board will now further work on the separation to avoid incurring potentially unnecessary separation costs while it focuses on a potential sale of the consumer business.
“We look forward to further evaluating the potential sale of ODP’s consumer business to determine whether a sale may provide greater value for our shareholders than a public company separation,” said Gerry Smith, ODP CEO. “If the consumer business is not sold, then ODP’s Board of Directors will reevaluate the advisability and timing of the public company separation.”
About Office Depot
Founded in 1986, Office Depot is a Boca Raton, Florida-based global distributor of workplace products and office supplies. For more information, visit www.officedepot.com.
Founded in 1986, Boston, Massachusetts-based Staples Inc. is a leading office-products company with annual sales of US$25 billion and more than 90,000 employees in 26 countries. For more information, visit www.staples.com.