Office Depot Inc, which has been trying to raise money to combat slumping sales, said on Tuesday it has received a $350 million investment from BC Partners, giving the private equity firm a nearly 20 percent stake.

BC Partners bought $350 million of Office Depot convertible preferred stock that carries a 10 percent dividend. Office Depot said $275 million of the preferred stock is immediately convertible into common stock at $5 per share, a 32 percent premium above Monday's closing price. The rest is convertible on the same terms upon shareholder approval.

Office Depot said the investment equals an initial ownership interest of about 20 percent, assuming the deal is approved by shareholders and the preferred stock is fully converted into its common stock.

Office Depot has been closing stores and laying off workers to cut costs to offset slumping sales. It has also been exploring ways to raise money, including selling and then leasing back U.S. and European properties, and selling certain accounts receivable in Europe.

(Reporting by Nicole Maestri and Jonathan Stempel; editing by John Wallace)