Office Depot Acquires IT Provider CompuCom for $1B

Office Depot said Tuesday it has agreed to acquire CompuCom, an IT provider for small to midsized businesses. The move gives 8 percent of Office Depot’s shares to Boston-based private equity firm Thomas H. Lee Partners. CompuCom, which is headquartered in Texas, has about $1.1 billion in annual sales. Office Depot will acquire CompuCom from Thomas H. Lee Partners, for about $1 billion, which includes the repayment of CompuCom debt and the issuance of new Office Depot shares. Following the transaction, Lee Partners will hold an equity position in Office Depot of about 8 percent of the total shares outstanding.

Total Retail's Take: Since its failed merger attempt with Staples, Office Depot has worked to transform its business from a traditional office supply retailer into a business services and technology provider. The acquisition of CompuCom goes right along with that strategy. Office Depot and CompuCom will tap into complementary core strengths to capture market share in a $25 billion, highly fragmented market as the first company to provide a nationwide, comprehensive network of enterprise-level tech services and products with a distinct last-mile advantage.

“Technology is the office supply of the future,” said Gerry Smith, CEO of Office Depot, in a company press release. “Today marks a significant milestone as we move to provide a unique business services platform for our current and future customers. Acquiring CompuCom is the first step in this new strategic direction.”