Office Depot, OfficeMax announce $1.2 billion merger
By Jay Keller
The merger Office Depot and OfficeMax creates a powerful retail entity geared to improve operations, expand earnings potential and improve cash-flow generation.
The two companies detailed the terms of the merger in a joint statement published on each corporate website outlining key strategic benefits geared to create long-term stockholder value.
The combined company revenue, according to the statement, was valued at $18 billion “with the ability to deliver long-term operating performance and improvements through its increased scale.”
“In the past decade, with the growth of the internet, our industry has changed dramatically,” said Office Depot Chairman and CEO Neil Austrian in the joint company statement.
“Combining our two companies will enhance our ability to serve customers around the world, offer new opportunities for our employees, make us a more attractive partner to our vendors and increase stockholder value.”
This new strategy includes a renewed focus on business-to-business customers and the ability to combine customer research to compete against rivals Staples and Amazon.com.
“Together, we will have the opportunity to build on our strong digital platforms and to expand our multichannel capabilities to better serve our customers and to compete more effectively,” said OfficeMax President and CEO Ravi Saligram in a statement.
Saligram also pointed out that stockholders could benefit from the “long-term upside potential of the combined company.”
Next up for the combined management team is to appoint a CEO who will be tasked with determining a new company name, marketing brands and the location of its corporate headquarters.
The Wall Street Journal first reported on Monday that executives were engaged in advanced talks to merge the companies in what’s expected to be a stock-for-stock deal.
Office Depot, Inc. was first incorporated in 1986 with the opening of the first retail store in Fort Lauderdale, Fla. and has sold $11.5 billion worth of products and services through FY2011.
OfficeMax Incorporated, formerly Boise Cascade Corporation, was first incorporated in 1951 and became an independent office products distribution company in 2004.
OfficeMax reports sales upward of $4 billion and employs more than 29,000 associates through direct sales, catalogs, online and at more than 900 retail locations throughout the U.S.