Office Depot parent sells CompuCom

The ODP Corp. has completed the sale of its IT services subsidiary.

The parent company of Office Depot and Office Max has sold its CompuCom Systems subsidiary to an affiliate of Variant Equity in a transaction valued up to $305 million. The deal consists of a mix of cash, an interest-bearing promissory note, and a contingent future earn out, ODP said. ODP in January 2021 said that it planned to sell CompuCom, which it acquired in 2017.

In a plan unveiled in May 2021, ODP is in the process of splitting into two companies, with the move expected to be completed in the first half of this year. The two companies will consist of ODP and its operating company, which will be renamed ODP Business Solutions and be a B2B business solutions provider, and Office Depot, which will include approximately 1,100 Office Depot and OfficeMax stores, along with an e-commerce website. The split is seen as paving the wave for Office Depot to be acquired by rival Staples.

[Read More: Staples still wants to acquire Office Depot]

“This action represents an important step in continuing to align our business model and resources towards our core strategy,” said Anthony Scaglione, CFO, ODP Corp. “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 company also said its board authorized a $200 million increase to its existing $450 million stock repurchase plan to $650 million. With the increased authorization, ODP 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.

“We’re excited about completing this important step for our future and the increase in our share buyback authorization,” Scaglione added. “We look forward to providing additional details on our year-end results conference call.”