Office Depot Has a Lot to Prove With the CompuCom Acquisition

Office Depot Has a Lot to Prove With the CompuCom Acquisition

Any company spending over $1 billion on a buyout is going to be on the hook to make its new asset work. That's the case with struggling office-products retailer Office Depot (NASDAQ: ODP), which in early October announced a roughly $1.1 billion acquisition-and-debt-assumption deal to buy privately held IT services specialist CompuCom Systems from private-equity operator Thomas H. Lee Partners.

The market indicated its displeasure at the news by trading Office Depot stock down by around 15%. Many investors clearly don't believe CompuCom can return the company to growth. I don't think it's impossible, but Office Depot will need to demonstrate that it's viable -- and do so quickly.

Image source: Office Depot. 

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Source: Fool.com