
Office Depot Acquires CompuCom: The Timeline & Challenges
Office Depot acquired CompuCom in 2017 for $1 billion -- or a lofty 10 times EBITDA. At the time, ChannelE2E warned that the struggling retail giant likely overpaid for the IT services provider. Fast forward to present day, and ChannelE2E still believes Office Depot paid far too much for the IT services asset -- especially since CompuCom is not a growth business, and was not a growth business ahead of the deal.The timeline since the buyout reveals a bumpy road for the buyer and the seller, including:- November 2018: CompuCom buyout shows some signs of progress -- but that was short-lived.
- April 2019: Office Depot and CompuCom issue revenue shortfall warning.
- May 2019: Office Depot confirms layoffs amid CompuCom business weakness.
- June 2019: Office Depot reveals CompuCom leadership shakeup.
Putting Profits Ahead of Revenue Growth
Explaining the business division's Q4 revenue shrinkage and margin growth, Office Depot CEO Gerry Smith said today:“CompuCom’s success is a key component of our transformation and we are very encouraged by the early signs of progress. We’ve improved profitability and are gaining traction as evidenced by new customer wins in the quarter. CompuCom’s refocused strategy of connecting people, technology, and the edge, places greater emphasis on its core offerings and expands its value proposition. Although we have much more work to accomplish, CompuCom is on the right path to capture profitable growth in the expanding digital workforce arena."