As Office Depot's core business continues to weaken, the big box retailer is pushing hard in new directions. The latest example: Office Depot (ODP) apparently has acquired Complete Office Solutions, a $150 million midmarket office equipment supplier, according to OPI.
ChannelE2E has reached out to Office Depot for comment but we have not independently confirmed the report.
> Related: New Financial Details From Office Depot's CompuCom Buyout (Oct. 12, 2017, 6:31pm ET)
According to OPI:
The apparent deal comes one week after Office Depot acquired CompuCom for roughly $1 billion -- or 10 times EBITDA, sources close to that deal told ChannelE2E. Armed with CompuCom, Office Depot wants to blend IT services and product sales into the SMB market.
Complete Office Solutions: Smart Move?
Assuming Office Depot is really buying Complete Office Solutions and maintaining it as a standalone unit for midmarket customers, I believe taking that approach could pay off for Office Depot, and correct some M&A mistakes other big box retailers have made.
When Best Buy acquired mindSHIFT to dip its toes into managed services, the company ended up selling it just two years later. Lessons learned from that failure can give big-box retailers a blueprint for how to stick the landing.
It is still yet to be seen whether this acquisition pays off for Office Depot. If it does though, it will definitely help, not only Office Depot, but other big-box retailers by giving an example of how to successfully gain traction in new markets.