Yesterday, ODP announced it had agreed to be acquired by Atlas Holdings in an all-cash deal for $28 per share, valuing the company at $965 million. While a significant premium to the previous day's closing price, we think the sale undervalues the company given the value we think ODP's retail restructuring and B2B transformation will create. ODP aims to close the sale before the end of the year but, given the value we assign the stock and allowing for the possibility of a competing bid, we maintain our Moderate risk rating and $41 price target, based on 12x our 2026 EPS estimate of $3.38. Cash conversion is improving. After declining sharply in 2024, free cash flow (FCF) has rebounded in the first half of 2025, and management is projecting at least $115 of FCF (excluding restructuring charges) for the year. The company ended 2Q:25 with net debt of just $68 million. Given the company's improved cash conversion, ODP is on track to exit the year with approximately zero net debt.