The ODP Corp. board of directors has completed a previously announced review of the public and private non-binding proposals the company has received about acquiring its consumer business — including the Office Depot and OfficeMax retail stores, and officedepot.com — and unanimously determined to reject them.
The board, assisted by its financial and legal advisors, decided it is in the best interests of the company and its shareholders not to divest it at this time, ODP announced. In reaching its conclusion, the board engaged in further discussions of the non-binding proposals with the potential buyers to ascertain additional details about the proposed terms and conditions, ODP noted. It also evaluated the expected value to the company of the proposals, taking into account the proposed structure, economic terms, certainty, expected timing and potential regulatory requirements.
The board determined not to resume the ODP previously announced potential public company separation at this time and instead to maintain all of its present businesses under common ownership. The company put the potential separation process on hold earlier this year pending evaluation of potential opportunities to divest the consumer business.
ODP recently completed a realignment of operations under its holding company structure into a B2C business and three distinct B2B business and digital segments, the company indicated:
- Office Depot, LLC. Includes retail consumer and small business products and services distributed through approximately 1,000 Office Depot and OfficeMax retail locations and officedepot.com.
- ODP Business Solutions. LLC. A B2B solutions provider serving small, medium and enterprise-level companies including the contract sales channel of ODP’s prior Office Depot Business Solutions Division, Grand & Toy, operating a distribution network serving customers in Canada, and Federation Entities, compromising more than a dozen regional office supply distribution businesses acquired by ODP to expand its reach and distribution network into previously underserved geographic areas.
- Veyer, LLC. A supply chain, distribution, procurement and global sourcing operation that procures and distributes products for both Office Depot, LLC and ODP Business Solutions, LLC, as well as third-party customers.
- Varis, LLC. A B2B digital platform technology business focused on transforming digital commerce between buying organizations and suppliers.
“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 Joseph Vassalluzzo, ODP board chair, in announcing the decisions. “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.”
