By Abigail Summerville
– In a significant development for the office supply market, ODP Corporation, the parent company of Office Depot and OfficeMax, has reached an agreement to be taken private by an affiliate of Atlas Holdings for approximately $1 billion, as announced on Monday.
Atlas Holdings, an investment firm, will acquire ODP for $28 per share, which reflects a 34% premium over the company’s closing stock price recorded on September 19. This transaction also encompasses ODP’s business unit, ODP Business Solutions.
Headquartered in Boca Raton, Florida, ODP has been actively exploring strategic options, engaging investment bank JPMorgan in the process. The company’s board of directors has approved the acquisition, which is anticipated to conclude by the end of the year, pending necessary approvals from both regulators and ODP shareholders.
ODP CEO Gerry Smith expressed confidence in the acquisition, stating, “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.”
Founded in 2002 and based in Greenwich, Connecticut, Atlas Holdings possesses ownership of 29 companies across the manufacturing and distribution sectors, showcasing its diverse investment portfolio.
While investors have reacted positively to the news, many found the decision somewhat unexpected given ODP’s tumultuous history with rival Staples, which is owned by Sycamore Partners. ODP and Staples had previously attempted to merge in 1996 and 2015, but both negotiations were thwarted by the Federal Trade Commission, which cited concerns over reduced competition in the office supply market for large business customers. A renewed offer from Staples in 2021 for $2.1 billion was also rejected by ODP.
ODP has faced mounting pressure from activist investment firms like AREX Capital Partners, coupled with a declining market cap as competition from e-commerce giants such as Amazon and Walmart has intensified. Currently, ODP operates approximately 830 retail locations.
(Reporting by Abigail Summerville in New York, Editing by Franklin Paul)
