Office Depot Completes Acquisition Of CompuCom

Office Depot has completed its acquisition of CompuCom Systems, an information technology services provider. In a hurricane-hit third quarter, Office Depot’s sales declined.

The company posted third quarter total sales of $2.62 billion compared to $2.84 billion in year-before period. Weather effected third quarter sales, Office Depot noted, as hurricanes Harvey, Irma and Maria disrupted operations in Puerto Rico and the southeastern U.S.

Retail division sales were $1.33 billion versus $1.48 billion in the year-earlier quarter with comparable store sales down 5% year over year. Division operating income came in at $82 million compared to $105 million in the year-prior period.

In the third quarter, Office Depot reported operating income of $108 million, net income from continuing operations of $98 million, or 19 cents per diluted share, and total company net income of $92 million, or 17 cents per diluted share. For the 2016 period, operating income was $117 million, net income from continuing operations was $330 million, or 61 cents per diluted share, and total company net income was $193 million, or 35 cents per diluted share.

CompuCom provides information technology services, products and solutions for enterprise, small and midsize businesses. Under the terms of the agreement, Office Depot acquired CompuCom from private equity firm Thomas H. Lee Partners for a total consideration of $1 billion.

“I’m pleased that we were able to deliver strong cash flow in the third quarter as well as operating results that were in line with our updated outlook,” said Gerry Smith, Office Depot CEO. “Today also marks an important milestone as we have taken several important steps on a longer-term journey to transform Office Depot from a traditional provider of primarily office products into a broader product and business services platform. This transformation will leverage our stores, online presence and sales force to create a unique omnichannel platform that offers services, products and solutions focused on businesses of all sizes while generating recurring revenue growth.”