Boca Raton, Fla. -- Office Depot has reached an agreement to sell its 50% stake in Office Depot de Mexico S.A. de C.V. to its joint venture partner Grupo Gigante, S.A.B. de C.V. for roughly $690 million in cash.
Office Depot de Mexico, which was founded in 1994 as a joint partnership between Office Depot and Grupo Gigante, has more than 248 stores throughout Mexico and Central America and more than $1.1 billion in annual sales.
“Grupo Gigante has been a wonderful partner in Mexico for almost 20 years,” said Steve Schmidt, president of international for Office Depot. “Over the past year, we have been actively exploring with them ways to illuminate the value of this business through a potential IPO. Through the process, they expressed a desire to own the business outright that culminated in the sale announced today.”
Office Depot expects to get $550 million after taxes, which it will use to redeem some convertible shares from private-equity firm BC Partners and to redeem $150 million of bonds that are due in August.
The sale is subject to Mexican regulatory approval and Grupo Gigante S.A.B. de C.V. shareholder approval.
Office Depot noted that, in accordance with the terms of its planned merger agreement with OfficeMax, it had obtained the required consent from OfficeMax to proceed with the sale.