Existing share repurchase authorization
increased by $200 million
The ODP Corporation (NASDAQ: ODP), a leading provider of
business services, products, and digital workplace technology
solutions through an integrated B2B distribution platform, today
announced that it has sold its CompuCom Systems subsidiary to an
affiliate of Variant Equity in a transaction valued up to $305
million.
“This action represents an important step in continuing to align
our business model and resources towards our core strategy,” said
Anthony Scaglione, chief financial officer of The ODP Corporation.
“By enhancing our core focus and leveraging our B2B assets and
digital commerce platform, we are in an excellent position to
maximize returns for our shareholders.”
The transaction consideration of up to $305 million consists of
a mix of cash, an interest-bearing promissory note, and a
contingent future earn out. The Company’s Board of Directors
continues to evaluate its future capital allocation plans and use
of proceeds, and today announced that it is authorizing a $200
million increase to its existing $450 million stock repurchase plan
to $650 million. The Company continues to execute upon its
previously announced $150 million accelerated stock repurchase
(ASR) plan, that when combined with previous purchases, will result
in the return of more than $300 million of capital to shareholders
in 2021. The Company will revisit the pace and method of the share
repurchase plan upon completion of the ASR, which is expected in
the first half of 2022. With the increased authorization, the
Company will have approximately $342 million for additional share
repurchases through June 30, 2022 following completion of the ASR
plan. The stock repurchase program may be modified, extended,
suspended or discontinued at any time.
“CompuCom has a long history of providing excellent technology
support and services for its large blue-chip customer base,” said
Farhaad Wadia, Managing Partner of Variant Equity. “We are thrilled
by this opportunity to partner with the CompuCom team and build on
the company’s rich history of innovation.”
“We’re excited about completing this important step for our
future and the increase in our share buyback authorization. We look
forward to providing additional details on our year-end results
conference call,” Scaglione added.
Goldman Sachs & Co. LLC acted as exclusive financial advisor
to ODP, and Simpson Thacher & Bartlett LLP acted as counsel to
ODP on this transaction.
About The ODP Corporation
The ODP Corporation (NASDAQ:ODP) is a leading provider of
business services and supplies, products and digital workplace
technology solutions to small, medium and enterprise businesses,
through an integrated business-to-business (B2B) distribution
platform, which includes world-class supply chain and distribution
operations, dedicated sales professionals and technicians, online
presence, and approximately 1,100 stores. Through its banner brands
Office Depot®, OfficeMax® and Grand&Toy®, as well as others,
the Company offers its customers the tools and resources they need
to focus on their passion of starting, growing and running their
business. For more information, visit news.theodpcorp.com and
investor.theodpcorp.com.
About Variant Equity
Founded in 2017, Variant Equity is a Los Angeles-based private
equity firm that makes control investments in corporate divestiture
and similarly operationally intensive transactions across a range
of industries including transportation and logistics, technology,
and business services. The firm's investment approach focuses on
businesses it believes are best-suited to reach their full
potential as stand-alone enterprises through the deployment of
Variant's operations and technology resources. For more information
please visit www.variantequity.com.
The ODP Corporation and Office Depot are trademarks of The
Office Club, Inc. OfficeMax is a trademark of OMX, Inc. CompuCom is
a trademark of CompuCom Systems, Inc. Grand&Toy is a trademark
of Grand & Toy, LLC in Canada. ©2021 Office Depot, LLC. All
rights reserved. Any other product or company names mentioned
herein are the trademarks of their respective owners.
FORWARD LOOKING STATEMENTS
This communication may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements or disclosures may discuss goals, intentions
and expectations as to future trends, plans, events, results of
operations, cash flow or financial condition, the potential impacts
on our business due to the unknown severity and duration of the
COVID-19 pandemic, or state other information relating to, among
other things, the Company, based on current beliefs and assumptions
made by, and information currently available to, management.
Forward-looking statements generally will be accompanied by words
such as “anticipate,” “believe,” “plan,” “could,” “estimate,”
“expect,” “forecast,” “guidance,” “outlook,” “intend,” “may,”
“possible,” “potential,” “predict,” “project,” “propose” or other
similar words, phrases or expressions, or other variations of such
words. These forward-looking statements are subject to various
risks and uncertainties, many of which are outside of the Company’s
control. There can be no assurances that the Company will realize
these expectations or that these beliefs will prove correct, and
therefore investors and stakeholders should not place undue
reliance on such statements.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include, among other
things, highly competitive office products market and failure to
differentiate the Company from other office supply resellers or
respond to decline in general office supplies sales or to shifting
consumer demands; competitive pressures on the Company’s sales and
pricing; the adverse effects of an unsolicited tender offer on our
business, operating results or financial condition; the risk that
the Company is unable to transform the business into a
service-driven, B2B platform that such a strategy will not result
in the benefits anticipated; the risk that the Company will not be
able to achieve its strategic plans, including the proposed
separation of its consumer business, and the high costs in
connection with these transactions may not be recouped if these
transactions are not consummated; the risk that the Company may not
be able to realize the anticipated benefits of acquisitions due to
unforeseen liabilities, future capital expenditures, expenses,
indebtedness and the unanticipated loss of key customers or the
inability to achieve expected revenues, synergies, cost savings or
financial performance; the risk that the Company is unable to
successfully maintain a relevant omni-channel experience for its
customers; the risk that the Company is unable to execute the
Maximize B2B Restructuring Plan successfully or that such plan will
not result in the benefits anticipated; failure to effectively
manage the Company’s real estate portfolio; loss of business with
government entities, purchasing consortiums, and sole- or limited-
source distribution arrangements; failure to attract and retain
qualified personnel, including employees in stores, service
centers, distribution centers, field and corporate offices and
executive management, and the inability to keep supply of skills
and resources in balance with customer demand; failure to execute
effective advertising efforts and maintain the Company’s reputation
and brand at a high level; disruptions in computer systems,
including delivery of technology services; breach of information
technology systems affecting reputation, business partner and
customer relationships and operations and resulting in high costs
and lost revenue; unanticipated downturns in business relationships
with customers or terms with the suppliers, third-party vendors and
business partners; disruption of global sourcing activities,
evolving foreign trade policy (including tariffs imposed on certain
foreign made goods); exclusive Office Depot branded products are
subject to additional product, supply chain and legal risks;
product safety and quality concerns of manufacturers’ branded
products and services and Office Depot private branded products;
covenants in the credit facility; general disruption in the credit
markets; incurrence of significant impairment charges; retained
responsibility for liabilities of acquired companies; fluctuation
in quarterly operating results due to seasonality of the Company’s
business; changes in tax laws in jurisdictions where the Company
operates; increases in wage and benefit costs and changes in labor
regulations; changes in the regulatory environment, legal
compliance risks and violations of the U.S. Foreign Corrupt
Practices Act and other worldwide anti-bribery laws; volatility in
the Company’s common stock price; changes in or the elimination of
the payment of cash dividends on Company common stock;
macroeconomic conditions such as future declines in business or
consumer spending; increases in fuel and other commodity prices and
the cost of material, energy and other production costs, or
unexpected costs that cannot be recouped in product pricing;
unexpected claims, charges, litigation, dispute resolutions or
settlement expenses; catastrophic events, including the impact of
weather events on the Company’s business; the discouragement of
lawsuits by shareholders against the Company and its directors and
officers as a result of the exclusive forum selection of the Court
of Chancery, the federal district court for the District of
Delaware or other Delaware state courts by the Company as the sole
and exclusive forum for such lawsuits; and the impact of the
COVID-19 pandemic on the Company’s business, including on the
demand for its and our customers’ products and services, on trade
and transport restrictions and generally on our ability to
effectively manage the impacts of the COVID-19 pandemic on our
business operations. The foregoing list of factors is not
exhaustive. Investors and shareholders should carefully consider
the foregoing factors and the other risks and uncertainties
described in the Company’s Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K filed with
the U.S. Securities and Exchange Commission. The Company does not
assume any obligation to update or revise any forward-looking
statement
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211231005114/en/
Danny Jovic Media Relations 561-438-1594
Danny.Jovic@officedepot.com
Tim Perrott Investor Relations 561-438-4629
Tim.Perrott@officedepot.com
ODP (NASDAQ:ODP)
Historical Stock Chart
From Jun 2024 to Jul 2024
ODP (NASDAQ:ODP)
Historical Stock Chart
From Jul 2023 to Jul 2024