SMB Nation Blog

SMB Nation has been serving the Bainbridge Island area since 2001, providing IT Support such as technical helpdesk support, computer support, and consulting to small and medium-sized businesses.

Office Depot Takes First Step in Strategic Transformation to Become Business Services Platform with Acquisition of CompuCom

Adding Market-Leading Provider of World-Class IT Services with Approximately $1.1 Billion in Sales to Create a Powerful Omnichannel Tech Services Platform

Combines CompuCom’s Broad Set of Managed Technology Services with Access to Office Depot’s Extensive Customer Base and Last-Mile Advantage to Generate Substantial Growth Opportunities

Expects Over $40 Million in Estimated Annual Cost Synergies within Two Years; Acquisition to be Accretive in Year One

Attractive Free Cash Flow and Significant Financial Flexibility to Implement Office Depot’s New Strategy to Grow Recurring Business Services Revenue

Office Max

Corporate/Financial News, Products and Services News
Tuesday, October 3, 2017 4:35 pm EDT
BOCA RATON, Fla.

NASDAQ:
ODP
US6762201068

BOCA RATON, Fla.--(BUSINESS WIRE)--Office Depot, Inc. ("Office Depot” or the “company”) (NASDAQ:ODP) today announced it is pivoting the company from a traditional office products retailer to a broader business services and technology products platform. As the first step in this new strategic direction, the company has entered into a definitive agreement to acquire CompuCom Systems, Inc. (“CompuCom”), a market-leading provider of award-winning IT services, products and solutions that enable the digital workplace for enterprise, small and midsize businesses. The company also provided a preliminary estimate of third-quarter financial results and a lowered outlook for Office Depot’s stand-alone business for 2017.

“Technology is the office supply of the future,” said Gerry Smith, chief executive officer of Office Depot. “Today marks a significant milestone as we move to provide a unique business services platform for our current and future customers. Acquiring CompuCom is the first step in this new strategic direction. The combination of CompuCom’s enterprise IT services with our millions of customers and approximately 1,400 distribution points gives us the credibility and scale to build a sustainable platform and stand apart from the competition. The company will create value for shareholders from a diversified revenue base with a clear opportunity to grow higher value services and business-to-business revenues.”

Under the terms of the agreement, Office Depot will acquire CompuCom from Thomas H. Lee Partners, L.P. ("THL"), a premier private equity firm, for a total consideration of approximately $1 billion, which includes the repayment of CompuCom debt and issuance of new Office Depot shares. Following the transaction, THL will hold an equity position in Office Depot of approximately 8% of total shares outstanding.

Founded in 1987, CompuCom provides highly-rated managed IT services to businesses with over 5.1 million unique end users. CompuCom’s team of approximately 6,000 licensed technicians is the largest employee field technician workforce in North America, providing remote and onsite technology support. CompuCom procures, installs and manages the lifecycle of hardware and software for businesses, and offers IT support services including remote help desk, data centers and on-site IT professionals. CompuCom was positioned in the Leaders quadrant of Gartner's® most recently released Magic Quadrant® for Managed Workplace Services, North America. CompuCom has established long-term relationships with hundreds of blue chip customers, including six of the top 10 Fortune 500 companies, and many small- and medium-sized businesses, including local franchises of national brands.

Compelling Market Opportunity

The combination represents a unique opportunity to bring world-class IT support services to all of Office Depot’s customers, particularly underserved small- and medium-sized businesses (SMBs).

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