Expects to Complete Tax-Free Spin-Off of Its
Consumer Business to ODP Shareholders in First Half 2022
The ODP Corporation (“ODP” or the “Company”) (NASDAQ:ODP), a
leading provider of business services, products and digital
workplace technology solutions through an integrated B2B
distribution platform, announced in May 2021, that its Board of
Directors unanimously approved a plan to separate ODP into two
independent, publicly-traded companies by means of a tax-free
spin-off to ODP shareholders. The Company continues to make
progress upon its plans to separate its consumer business from its
B2B operations and expects to complete this transformation in the
first half of 2022.
Today, the Board of Directors announced the selection of the
Chief Executive Officers (CEO) and company names for each of the
two companies, which would become effective upon the completion of
the spin-off:
- The ODP Corporation – a leading B2B solutions provider
serving small, medium and enterprise level companies, will consist
of several operating companies, including the contract sales
channel of ODP’s current Business Solutions Division, which will be
renamed ODP Business Solutions, and ODP’s newly formed B2B digital
platform technology business, which will be named Varis. ODP
Business Solutions and Varis will be owned by ODP, but operated as
separate businesses. ODP will also continue to own the global
sourcing operations and other sourcing, supply chain and logistics
assets. Gerry Smith will continue to serve as CEO of The ODP
Corporation following the separation.
- Office Depot – a leading provider of retail consumer and
small business products and services distributed via approximately
1,100 Office Depot and OfficeMax retail locations and an
award-winning eCommerce presence, officedepot.com, will be spun-off
and will be named Office Depot, Inc. Kevin Moffitt, currently EVP,
Chief Retail Officer of The ODP Corporation, will be appointed CEO
of Office Depot upon completion of the spin-off.
Joseph S. Vassalluzzo, The ODP Corporation’s non-executive
Chairman of the Board, said, "We are excited to take this
significant step in our separation planning as these decisions are
foundational to others to come. Gerry has done an incredible job
transforming the Company since joining as has Kevin, positioning it
to be able to pursue the planned separation. We are confident that
Gerry and Kevin will be the right leaders to help each business
strengthen our ability to meet the needs of our customers, while
delivering profitable growth and greater value to our
stakeholders.”
“Kevin’s experience with leading our retail and eCommerce
organizations over the past several years positions him as the
ideal candidate to become CEO of Office Depot upon the separation,”
said Smith.
The separation is expected to allow ODP and Office Depot to
pursue unique market opportunities and growth strategies, improving
the value for shareholders and stakeholders. While ODP and Office
Depot will be separate, independent companies, it is anticipated
that they will share commercial agreements to allow them to
continue to leverage scale benefits in such areas as product
sourcing and supply chain.
Additional details of the separation are expected to be
announced in the coming months, including Board and additional
leadership teams of both companies. The Company anticipates that
the separated companies will be capitalized to provide the
financial flexibility to take advantage of future strategic
opportunities.
The transaction is subject to certain conditions, including
final approval by ODP’s Board of Directors, opinions from tax
counsel and a favorable ruling by the IRS on the tax-free nature of
the transaction to the Company and its shareholders, the filing and
effectiveness of a Form 10 registration statement with the US
Securities and Exchange Commission, the approved listing of Office
Depot, Inc.’s common stock on a national securities exchange, and
the completion of any necessary financings. The separation will not
require a vote of ODP shareholders. There can be no assurances
regarding the ultimate timing of the separation or that the
transaction will be completed.
About The ODP Corporation The ODP Corporation
(NASDAQ:ODP) is a leading provider of business services and
supplies, products and digital workplace technology solutions to
small, medium and enterprise businesses, through an integrated
business-to-business (B2B) distribution platform, which includes
world-class supply chain and distribution operations, dedicated
sales professionals and technicians, online presence, and
approximately 1,100 stores. Through its banner brands Office
Depot®, OfficeMax®, CompuCom® and Grand&Toy®, as well as
others, the Company offers its customers the tools and resources
they need to focus on their passion of starting, growing and
running their business. For more information, visit
news.theodpcorp.com and investor.theodpcorp.com.
ODP and Office Depot are trademarks of The Office Club, Inc.
OfficeMax is a trademark of OMX, Inc. CompuCom is a trademark of
CompuCom Systems, Inc. Grand&Toy is a trademark of Grand &
Toy, LLC in Canada. ©2021 Office Depot, LLC. All rights reserved.
Any other product or company names mentioned herein are the
trademarks of their respective owners.
FORWARD LOOKING STATEMENTS
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements or disclosures may discuss goals, intentions
and expectations as to future trends, plans, events, results of
operations, cash flow or financial condition, the potential impacts
on our business due to the unknown severity and duration of the
COVID-19 pandemic, or state other information relating to, among
other things, the Company, based on current beliefs and assumptions
made by, and information currently available to, management.
Forward-looking statements generally will be accompanied by words
such as “anticipate,” “believe,” “plan,” “could,” “will,”
“estimate,” “expect,” “intend,” “may,” “possible,” “potential,”
“project,” “propose” or other similar words, phrases or
expressions, or other variations of such words. These
forward-looking statements are subject to various risks and
uncertainties, many of which are outside of the Company’s control.
There can be no assurances that the Company will realize these
expectations or that these beliefs will prove correct, and
therefore investors and stakeholders should not place undue
reliance on such statements.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include, among other
things, delays or challenges in completing the separation during
the expected timeline; risks related to the fulfillment of the
conditions to complete the separation; difficulties in ensuring
that the spin-off remains tax-free; the expected costs and benefits
of the separation; the inability to adequately capitalize the
separated companies; changes in demand for the Company’s existing
and future products and services; changes to the products and
services sold and provided before and after the separation;
unanticipated downturns in business relationships with customers;
obstacles preventing the separated companies from maximizing profit
opportunities, cost savings, and potential synergies; the failure
to retain key employees or attract talent for each of the separated
companies; the inability of the separated businesses to align their
strategies and capital investments to meet customer demands or
match their assets and investment profiles; disruption in key
business activities or any impact on the Company’s relationships
with third parties as a result of the separation; competitive
pressures on the Company’s sales and pricing; increases in the cost
of material, energy and other production costs, or unexpected costs
that cannot be recouped in product pricing; the introduction of
competing technology products and services; unexpected technical or
marketing difficulties; unexpected claims, charges, litigation,
dispute resolutions or settlement expenses; new laws and
governmental regulations; the impact of, and government response
to, the COVID-19 pandemic; and domestic and international economic
conditions. The foregoing list of factors is not exhaustive.
Investors and shareholders should carefully consider the foregoing
factors and the other risks and uncertainties described in the
Company’s Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, and Current Reports on Form 8-K filed with the U.S.
Securities and Exchange Commission. The Company does not assume any
obligation to update or revise any forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210824005245/en/
Tim Perrott
Investor Relations
561-438-4629 Tim.Perrott@officedepot.com
Danny Jovic
Media Relations
561-438-1594 Danny.Jovic@officedepot.com
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