Office Depot Sells CompuCom In $305M Deal

The deal, which is significantly lower that the $1 billion Office Depot paid in 2017 for systems integrator and managed services provider CompuCom, could open the door for rival Staples to execute on its planned acquisition of Office Depot.

Office Depot executed on a long-expected plan to sell its CompuCom Systems subsidiary in a deal worth up to $305 million, and in the process made itself a more attractive acquisition target for rival Staples.

Office Depot on Friday unveiled the sale of CompuCom systems integration business to an affiliate of Variant Equity Advisors, a Los Angeles based equity firm specializing in corporate divestitures. The acquisition of CompuCom marks the first move by Variant into the managed services business.

Variant will pay up to $305 million via a mix of cash, an interest-bearing promissory note, and a contingent future earn out.

[Related: 5 Things To Know About Staples’ Bid To Acquire Rival Office Depot]

The $305-million purchase price for CompuCom represents a significant discount compared to the $1 billion that Office Depot paid in 2017 when it acquired CompuCom.

The sale of CompuCom has been expected ever since Office Depot, a leading provider of business services and supplies and technology, early last year unveiled a bid by rival Staples.

USR Parent, the corporate name of Staples, in January offered to acquire Office Depot in a $2.1 billion deal. As part of that deal, Staples proposed the eventual divestiture of Office Depot’s business-to-business-focused holdings, including IT managed service provider CompuCom.

Office Depot in May also unveiled plans to separate into two organizations. The first consists of its company’s retail consumer and small business services that are sold through ecommerce and about 1,100 retail Office Depot and OfficeMax location.

The second is based on Office Depot‘s B2B business, which includes the ODP Business Solutions Division, Canada-based Grand & Toy, and ODP’s regional office supply distribution business, along with ODP’s new B2B digital platform technology business. However, that did not include CompuCom, which Office Depot said a year ago this month that it would eventually sell.

Office Depot, also known by its ODP ticker symbol, did not respond to a weekend request by CRN for more information.

However, Anthony Scaglione, chief financial officer of Boca Raton, Fla.-based ODP, said in a prepared statement that the sale of CompuCom is an important step in continuing to align its business model and resources towards the company‘s core strategy.

“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,” Scaglione said.

Farhaad Wadia, managing partner of Variant Equity, said in a prepared statement, “CompuCom has a long history of providing excellent technology support and services for its customer base. We are thrilled by this opportunity to partner with the CompuCom team and build on the company’s rich history of innovation.”

CompuCom President Mick Slattery, in a prepared statement, said his company expects the acquisition to help it better deliver on its vision to connect people, technology, and the edge with a seamless experience.

“We are excited to combine Variant’s financial acumen and operations and technology resources with CompuCom’s capability to deliver single-source end-to-end technology solutions,” Slattery said. ”Our shared vision for reimagining the future of work makes me truly excited about what is ahead for CompuCom and our customers. We are in an even stronger position to deliver the best user experience for our customers and to continue to earn the right to serve them every day.”