ODP Corp. Receives Late Buzzer Beater From Atlas Holdings With $1B Acquisition…

“That was easy…” - Atlas Holdings after buying ODP Corporation

Pour one out for Staples guys. After 30 years of trying and failing to hook up with Office Depot… blocked by the FTC in ’96, cockblocked again in 2015, laughed off in 2021… the old flame (read: ODP Corporation) just got taken home by Atlas Holdings for $1B. Translation: For a 34% premium ODP is being taken private and off the market. 

(Source: Giphy) 

In short, the numbers are as follows: Atlas is paying $28 a share, valuing the whole company at less than what Apple clears from selling AirPods in a fiscal quarter. Office Depot used to be a $15B brand, trading at a peak of $405 back in 2006. Now it’s an outdated stock that’s plummeted -93% since its peak as Atlas gives shareholders the most action they’ve had in quite some time.

(Source: Reuters)

But, but, but… why Atlas of all companies? Because broken is their brand. If you don’t know about these dudes, here’s the gist: Atlas isn’t here for innovation. They’re the junkyard PE guys from Greenwich who buy failing assets, bolt on some “operating partners,” and pray the corpse twitches. Their resume is full of “rescues” like Pueblo Steel (basically bought a rusting mill and rebranded it “sustainable”), LSC Communications (remember print media? Exactly), and a laundry list of random aluminum and auto suppliers they Frankenstein back together until someone else takes the carcass.

And now Office Depot, a chain of 830 fluorescent-lit liminal spaces that still smell like printer ink and stale carpet, fits perfectly in this. Where they need to hit milestones in order for this to be worth the buy (good luck). For starters, Atlas will pretend this is about “B2B growth initiatives”... which will include firing staff, shrinking retail, and shoving everything into bulk corporate contracts. 

(Source: Giphy) 

But that’s just the tip of the iceberg here. By buying Office Depot, Atlas will absolutely have to convince anyone under 40 that office supply stores aren’t just where your mom bought Trapper Keepers in 1998, all while turning their 830 locations that look like Soviet waiting rooms into “distribution centers.”

Additionally, they’ll have to get the ghost of OfficeMax of out the system (I bet no one has stepped foot in one since the Bush administration), and go toe-to-to with Amazon who already sells pens cheaper, faster, and without the spirit of Bill Lumbergh stalking them through aisles. But alas, for investors the work is already done. Everything post merger is Atlas’ problem now, while investors get to enjoy their clean cash-out. So with that, here’s to another victim of private equity and congrats to the investors who just caught a participation trophy thrown at them. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Amazon and Apple as mentioned in the article.