Why the Office Depot Inc (ODP) Supply Industry Is so Hot: OfficeMax Inc (OMX), ACCO Brands Corporation (ACCO)

Credit Suisse has projected $441 million in net synergies, which would bring the combined EBITDA including Mexico to $989 million. However, that synergy number was highly dependent on the merged entity finding someone to take its excess locations as the cost of closing a store could be as high as $1 million. Despite the expectations that Staples would buy most of the closed stores, nothing of this sort was announced in the conference call. This has led to a large sell-off of both shares.

Foolish Bottom Line

Though, I am pretty bearish on the future of this industry, the cheap valuations, especially the recent sell-off of the newly-wed Office companies, help me to be a bit optimistic about these companies.

The article Why the Office Supply Industry Is so Hot originally appeared on Fool.com and is written by Masam Abbas.

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