The ODP Corporation (NASDAQ: ODP), the parent of Office Depot and OfficeMax, is reportedly exploring a potential sale that could mark a pivotal shift in the company’s strategic trajectory. According to a Dealreporter update on July 29, 2025, the office supply veteran has enlisted JPMorgan to evaluate buyout options and has already requested preliminary bids from interested parties, notably private equity firms. The core appeal lies in the company’s increasingly diversified business model, which is transitioning from retail-heavy operations to a leaner B2B and supply chain-focused structure. The consumer division has shown surprising resilience in 2025, with comp trends significantly improving, while the B2B segment is gaining traction with large contracts and an entry into the hospitality sector. Despite these operational gains, the company continues to operate under pressure from secular retail headwinds, prompting the current strategic evaluation. Here’s a deeper dive into the key factors driving ODP’s decision to explore a sale and what acquirers may be targeting.
Restructuring Success Has Created A Leaner, More Scalable Platform
ODP’s ongoing transformation through its “Optimize for Growth” restructuring initiative has realigned the company’s cost structure, operational focus, and business priorities. With 46 fewer retail locations in operation versus last year and a shift away from consumer dependence, the company has materially reduced fixed costs while targeting higher-return enterprise segments. In the first quarter of 2025, the company closed 12 stores and restructured internal divisions to better support supply chain scalability and enterprise accounts. As a result, adjusted free cash flow surged to $45 million, more than doubling year-over-year. Importantly, this momentum reflects a structurally more efficient company rather than short-term gains. Fixed cost reductions and operating model improvements provide an attractive backdrop for acquirers looking for predictable cash flow and margin stability. Moreover, the plan allows ODP to be more nimble in capital allocation, with lower CapEx requirements—just $21 million in Q1 2025, down from $31 million a year prior—giving any buyer a clear path to sustaining cash generation. The company’s strategic shift toward third-party logistics via its Veyer unit further de-risks the business by reducing reliance on declining retail traffic. All told, ODP now presents a more streamlined and asset-light profile, ready for scale via operational and financial engineering, particularly appealing for private equity investors.
B2B Pivot & Contract Wins Offer A Long-Term Growth Runway
ODP’s deliberate pivot to business-to-business (B2B) services through ODP Business Solutions is central to its go-forward value proposition. While enterprise demand has remained soft across the industry, ODP has continued to win major contracts—more than $500 million in annualized spend from newly signed deals over the past three quarters. However, these contracts are still in the onboarding phase and have not yet contributed materially to revenue, offering a latent growth pipeline for prospective buyers. The most significant among them is CoreTrust, a consortium with 3,500 enterprise members spanning hospitality, manufacturing, and retail. ODP expects the full ramp-up of these accounts to start improving financials by the second half of 2025. This provides a rare opportunity for an acquirer to step in just as growth inflection is poised to accelerate. Additionally, the company is entering underserved verticals like hospitality, having signed an agreement to supply over 15,000 hotel locations. While this market entry is still in early innings, ODP has already secured partnerships with key suppliers and is building inventory and salesforce capabilities. The B2B segment’s revenue was $852 million in Q1 2025—down 8% YoY—but with upcoming tailwinds from new customer onboarding and segmental expansion, it is well-positioned to contribute to margin accretion and top-line growth. A buyer with the capital and operational muscle to expedite onboarding and cross-sell across segments could realize meaningful synergies and unlock long-term shareholder value.
Strong Supply Chain Arm (Veyer) Offers A Standalone Value Driver
ODP’s Veyer division—a supply chain and third-party logistics platform—is emerging as a distinct value creator that could be a core attraction for strategic or financial buyers. Veyer’s third-party revenue grew 89% year-over-year in Q1 2025, reaching $17 million, with several new customer accounts under onboarding. Though total segment sales were $1.2 billion, this includes intra-company eliminations. Veyer’s performance is evidence of ODP’s ability to diversify into high-growth logistics services at scale. The division provides procurement, warehousing, and last-mile delivery across the U.S., leveraging existing infrastructure initially built for Office Depot and OfficeMax. EBITDA from third-party customers held steady at $3 million, reflecting startup costs as new clients are onboarded, but also pointing to the division’s potential to scale margin profitability rapidly. Moreover, Veyer is positioned to absorb future logistics demand from the hospitality and enterprise sectors, giving buyers optionality to vertically integrate supply chains or spin off the business entirely. For private equity firms, the presence of a growth-stage logistics unit inside a legacy retail framework offers multiple paths to value realization—through bolt-on M&A, margin expansion, or capital carve-outs. With the broader retail supply chain space in flux, Veyer could command a standalone valuation multiple far exceeding the company’s current blended multiple, providing arbitrage potential for dealmakers.
Deep Valuation Discount & Cash Flow Visibility Make It A Classic LBO Target
ODP’s valuation metrics underscore its attractiveness as a leveraged buyout (LBO) candidate. As of July 29, 2025, ODP trades at just 0.20x LTM EV/Revenue and 5.32x LTM EV/EBITDA, with a 12-month trailing Price/Sales of 0.08x. These metrics are substantially below peer benchmarks, reflecting a market that has not yet fully priced in the upside from its restructuring or B2B expansion. Meanwhile, LTM free cash flow has improved substantially, with a market cap/free cash flow multiple of just 6.03x and a levered FCF yield of 16.6%. Such metrics are compelling for private equity players focused on cash-on-cash returns. The company’s clean balance sheet—with just $262 million in total debt and $653 million in liquidity—offers headroom for additional leverage to fund a take-private transaction. Furthermore, with a diversified revenue base and cost takeout initiatives already in motion, the business provides enough operational levers to support both deleveraging and margin growth post-acquisition. The forward EV/EBIT multiple of 9.78x could compress significantly if EBITDA reaccelerates in H2 2025, particularly from new contracts and the hospitality segment. Buyers may also be eyeing the possibility of splitting ODP into retail, B2B, and supply chain businesses, extracting value through targeted exits or IPOs. For strategic investors, especially those in distribution or logistics, the ability to acquire a cash-generative platform with cross-sector exposure at a deep discount is increasingly rare in the current M&A environment.
Key Takeaways
ODP’s decision to explore a sale follows a period of successful internal restructuring, operational streamlining, and strategic redirection toward higher-margin, enterprise-facing business lines. While the legacy retail business remains in slow structural decline, it is now contributing improved comp trends and stronger cash flow, providing near-term stability. The B2B and logistics arms offer tangible growth avenues, albeit not yet fully reflected in reported financials. The company’s current LTM EV/Revenue of 0.20x and EV/EBITDA of 5.32x suggest a market valuation that does not account for these growth levers or the improved cash profile. However, execution risks remain, particularly around onboarding large B2B clients and scaling new verticals like hospitality. Additionally, external factors such as tariffs could influence cost structures, though management appears to have mitigated these risks. In weighing all factors, ODP presents a low-multiple, cash-generative, operationally lean platform that may appeal to both strategic and financial buyers willing to navigate short-term volatility for long-term asset revaluation.
