Buyout Imminent
The market has changed.
For the next three years every company that has wanted to merge or sell themselves to a competitor will do it.
The regulators have given capitalists a greenlight to do deals.
I haven’t seen this many event driven deals in a long-time.
Given the mergers and acquisitions backdrop, I have now been almost exclusively focused on finding event driven ideas.
Today I am writing about one of my favorite event driven opportunities.
Management is intent on selling the business.
There is a clear buyer with capital ready to deploy.
Rumors have been circling that bankers have been hired.
Huge upside if a deal happens — which I think is imminent.
Low downside if nothing transpires as the free cash flow yield is double digits.
Let’s dig in…
The ODP Corporation ODP 0.00%↑ provides business products, services, and digital workplace technology solutions across the U.S., Puerto Rico, the U.S. Virgin Islands, and Canada. It operates through three segments: ODP Business Solutions (B2B supplies, office furniture, technology, and print services), Office Depot (retail and online office products and services), and Veyer (supply chain, procurement, and sourcing). Founded in 1986 and headquartered in Boca Raton, Florida, ODP serves small to enterprise-level businesses through its integrated retail, distribution, and digital platforms.
I won’t go into much detail on the economics of the business as I think this is a clear buyout target and could be imminent given the way things are moving in the M&A environment. But I will be going over why I think this is a buyout and who is the buyer.
Investment Thesis:
With a share price of $20.88, ODP has a market cap of $628 million and an enterprise value of $696 million. There is $177 million of cash on the balance sheet, which is offset by $245 million of debt. The company also has $132 million of company owned life insurance that slowly converts to cash overtime when older ex-employees pass away.
On July 29, 2025, DealReporter announced that ODP is exploring a sale of their entire business. The advisor in the deal is JPMorgan and according to DealReporter, private equity is interested in the assets.
The most logical buyer of ODP is Staples, which is owned by Sycamore Partners, a private equity firm. I believe that Sycamore Partners is bidding on ODP again.
As context, Staples has tried three times to merge with Office Depot, each time running into roadblocks. The first attempt in 1997, a $4 billion deal, was blocked by the FTC over antitrust concerns. Nearly two decades later, in 2015, Staples launched a $6.3 billion bid, but regulators again intervened, and a federal judge halted the deal in 2016. Most recently in 2021, Staples came back with a $2.1 billion all-cash offer, or $40 per share, but Office Depot rejected it, marking the third failed effort in what has become one of retail’s longest-running “will-they-won’t-they” sagas.
If Sycamore-owned Staples takes a run at ODP again, the playbook is classic scale + carve-out: fold ODP’s B2B “ODP Business Solutions” and logistics arm Veyer into Staples to boost supplier leverage, unify sourcing (including Asia), and streamline warehouses, delivery routes, and IT—while rationalizing hundreds of overlapping stores and consolidating duplicative e-commerce, print, and tech-services platforms. The B2B book—large corporate and government contracts, adjacency categories (jan/san, breakroom, tech), and copy/print—would meaningfully deepen Staples’ moat versus Amazon Business and smooth the decline in legacy retail foot traffic. The catch remains antitrust: regulators twice blocked a full merger, so a regulator-friendly structure likely means PE-led partial acquisition (B2B + supply chain) with retail divested to a third party, letting Staples capture most synergies (procurement, logistics, SG&A) without recreating the old two-player retail duopoly.
If Sycamore-owned Staples revisits ODP, the synergy upside dwarfs ODP’s size. In its 2015 attempt, Staples projected ~$1B in annual cost savings, and today analysts see $1.5–$2.0B per year still possible. Roughly $500–$750M could come from closing 350–500 overlapping stores, with another $200–$500M in procurement and supply chain savings by folding Staples’ logistics into ODP’s Veyer and consolidating B2B contracts. Add corporate SG&A cuts and distribution efficiencies, and the combined entity could conservatively extract $1.5B+ annually. At a 10x multiple, that’s $15–$20B of value creation versus ODP’s $628M market cap — explaining both why private equity circles hungrily, and why regulators have twice blocked Staples from swallowing its rival.
If Staples (via Sycamore) revisits a bid for ODP today, a reasonable range based on precedent would put the offer between $29–$34 per share, reflecting a 40%–60% premium over the current ~$21 price. That implies an acquisition value of $900 million to $1.1 billion, which stands in contrast to ODP’s existing ~$630 million market cap—but is still well below the ~$2.1 billion proposed in 2021, when market conditions and regulatory appetite were very different.
This may be the most opportune moment in decades for Staples (via Sycamore) to strike. With Trump back in the White House and a pro-business, deregulatory agenda taking shape, the FTC’s stance on retail consolidation is expected to soften compared to the Obama and Biden years that blocked two prior Staples–ODP tie-ups. Regulators are now far more focused on Big Tech and digital monopolies than on legacy office-supply chains fighting for survival in a shrinking category. That creates a narrow window where the political climate, combined with ODP’s rock-bottom $628 million valuation and Staples’ massive synergy upside, makes a deal not only financially compelling but also politically possible in a way it simply wasn’t before.
Disclosure: I do not own ODP Corporation $ODP, but I may consider taking a position following this article. This is not investment advice. I am not an investment advisor. Do your own research.