ODP Corporation (ODP) Delays Public Company Separation to Evaluate Potential Sale of Its Consumer Business

The ODP Corporation (“ODP” or the “Company”) (NASDAQ: ODP), a leading provider of business services, products and digital workplace technology solutions through an integrated B2B distribution platform, today announced that its Board of Directors determined to delay the previously announced public company separation to evaluate a potential sale of the Company’s consumer business.

In May 2021, the Company announced that its Board of Directors unanimously approved a plan to separate ODP into two independent, publicly-traded companies by means of a tax-free spin-off to ODP shareholders. In November 2021, USR Parent, Inc., the parent company of Staples and a portfolio company of Sycamore Partners, reaffirmed its non-binding proposal to acquire the Company’s consumer business, including the Office Depot and OfficeMax retail stores business, the Company's direct channel business (officedepot.com), and the Office Depot and OfficeMax intellectual property, including all brand names, for $1 billion in cash. The Company remains in conversation with Sycamore as it further evaluates the potential value and regulatory risk of Sycamore’s proposed transaction.

In December 2021, ODP’s Board of Directors received a non-binding proposal from another third party to acquire the Company’s consumer business. The terms of that proposal are confidential.

The Company’s Board of Directors is carefully reviewing both proposals with the assistance of its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders. While the Company has previously been focusing on completing the public company separation during the first half of 2022, it has determined to delay further work on the separation in order to avoid incurring potentially unnecessary separation costs while it focuses on a potential sale of the consumer business. There can be no assurance that a sale of the consumer business will take place and, if it were to take place, as to the terms of such a sale.

“We look forward to further evaluating the potential sale of ODP’s consumer business to determine whether a sale may provide greater value for our shareholders than a public company separation,” said Gerry Smith, chief executive officer of The ODP Corporation. “If the consumer business is not sold, then ODP’s Board of Directors will reevaluate the advisability and timing of the public company separation.”

The ODP Corporation’s previous holding company reorganization provided it with the flexibility to simplify its legal structure and more closely align its operating assets to their respective operating channels. The Company has mostly completed that realignment, resulting in the following operating businesses owned under The ODP Corporation holding company structure:

ODP Business Solutions, LLC – a leading B2B solutions provider serving small, medium and enterprise level companies, including the contract sales channel of ODP’s prior Office Depot Business Solutions Division.

Office Depot, LLC – a leading provider of retail consumer and small business products and services distributed via approximately 1,100 Office Depot and OfficeMax retail locations and an award-winning eCommerce presence, officedepot.com.

Varis, LLC – ODP’s B2B digital platform technology business focused on transforming digital commerce between buying organizations and suppliers (govaris.com).

Federation Entities – More than a dozen regional office supply distribution businesses acquired by ODP as part of its transformation to expand its reach and distribution network into geographic areas that were previously underserved. These businesses are wholly owned by ODP but continue to operate under their own brand names.

Veyer, LLC – ODP’s world-class supply chain, distribution, procurement and global sourcing operations.

The operating businesses will each pursue their unique market opportunities and growth strategies, with separate management dedicated to improving the value for shareholders and stakeholders.

Simpson Thacher & Bartlett LLP and Goldman Sachs & Co. LLC are acting as legal and financial advisors to the Company, respectively.

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