Office Depot Gets $350 Million Private Equity Investment

Office Depot says that private equity firm BC Partners has made a $350 million investment through a preferred stock purchase, giving it a stake in the office supplies chain of approximately 20 percent.

Eric Risberg / AP

BC bought about $275 million of the company's Series A convertible perpetual preferred stock and approximately $75 million of its Series B conditional convertible perpetual preferred shares.

Boca Raton, Fla.-based Office Depot, which previously announced that it would close approximately 9 percent of its North American stores and cut 2,200 jobs, said it will use the proceeds for general corporate purposes.

The Series A stock included in the preferred stock purchase can be converted into common stock immediately at a conversion price of $5 per share, which is a 32 percent premium to Office Depot's Monday closing stock price of $3.79 per share.

The Series B stock will become convertible at the same terms as the Series A shares if stockholders approve shares being issued in connection with the conversion.

The investment also allows for three BC Partners executives to become part of Office Depot's board, which has grown to 14 members. Among those joining the board include managing partner Raymond Svider, senior partner James Rubin and partner Justin Bateman.

The transaction, which was approved by Office Depot's board, closed this morning.

In early trading, Office Depot shares rose 11 cents, or 2.9 percent, to $3.90.

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