The ODP Corporation announced that it has sold its CompuCom Systems subsidiary to an affiliate of Variant Equity in a transaction valued up to $305 million (€269 million).
The transaction consideration of up to $305 million (€269 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 announced that it is authorising a $200 million (€176 million) increase to its existing $450 million (€396 million) stock repurchase plan to $650 million (€573 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 maximise returns for our shareholders.”
The Company continues to execute upon its previously announced $150 million (€132 million) accelerated stock repurchase (ASR) plan, that when combined with previous purchases, will result in the return of more than $300 million (€264 million) of capital to shareholders in 2021. The Company said it 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 authorisation, the Company will have approximately $342 million (€301 million) for additional share repurchases through 30 June 2022 following completion of the ASR plan. The stock repurchase programme 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.
