ODP Corp. No Longer Plans to Sell Office Depot, OfficeMax

Office Depot and OfficeMax retail stores and channel business won’t be up for sale by the ODP Corp. any time soon.

The board of the corporation also said it would no longer pursue a separation of its business and consumer units — at least for now. Furthermore, it will maintain all its businesses under common ownership. ODP Corp. put that separation process on hold earlier this year pending evaluation of potential opportunities to sell off the company’s consumer business.

ODP’s Joseph Vassalluzzo

Joseph Vassalluzzo is chair of the board of directors of ODP.

“Given current market and macroeconomic conditions, as well as the benefits of maintaining purchasing and supply chain synergies, the board has determined that now is not the right time to further pursue separating the company into two independent, publicly traded companies,” said Vassalluzzo. “However, the completion of our internal reorganization will make such a potential separation substantially simpler should the company determine to resume the separation process following a change of market conditions in the future.”

Holding Company Structure

ODP Corp. recently transformed its operations under its holding company structure into its B2C business and three distinct B2B business and digital segments. These focused on enhancing value for shareholders. They include Office Depot, ODP Business Solutions, Veyer (a supply chain, distribution, procurement and global sourcing operation) and Varis (a B2B digital platform technology business). The company expects total revenue to be approximately $2 billion in the second quarter.

Earlier this year, ODP sold its CompuCom Systems subsidiary to an affiliate of Variant Equity in a deal worth up to $305 million. Office Depot acquired CompuCom for $1 billion in 2017. At the time, the acquisition highlighted Office Depot’s new strategic direction — one poised to make it significant player in the channel.

Channel analyst Jay McBain of Canalys in January wasn’t high on the sale to Variant. He described it as an “extremely low valuation for MSP revenue with blue chip clients.” Ultimately, Office Depot’s attempts to become a force in the channel were unsuccessful.

ODP’s Gerry Smith

Gerry Smith is chief executive officer of ODP.

“Completing [this recent] realignment of our operating businesses enables our dedicated management teams to focus on meeting their respective customers’ needs and implement channel specific go-to-market strategies. And by the end of the year, it will also enable us to provide greater visibility to our investors about these operating businesses’ performance on a go-forward basis,” Smith said.