ODP announces more details before spin-off
August 26, 2021
The ODP Corporation announced its selection of chief executive officers and company names ahead of planned spin-off.
The ODP Corporation (ODP) 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 said it 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.
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 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 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 organisations over the past several years positions him as the ideal candidate to become CEO of Office Depot upon the separation,” said Smith.
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 capitalised 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 favourable 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. ODP added that there can be no assurances regarding the ultimate timing of the separation or that the transaction will be completed.
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