The ODP Corporation has unveiled the names of the two companies it will divide into and the executives slated to run both businesses. The moves follow Office Depot’s plan to split into two separate companies first announced in May. That plan itself follows the move by rival Staples to acquire all of Office Depot and sell off that company’s business-to-business operations or acquire just the retail portion of Office Depot.
Office Depot, which expects to complete its split into two companies sometime during the first half of 2022, said its B2B solution provider business will be known as The ODP Corp. once the split is final. The ODP Corp. will be reorganized to include ODP Business Solutions, which will include the contract sales channel of its current Business Solutions Division, and Varis, a new B2B digital platform technology business. Both will be owned by ODP but operated as separate businesses. Office Depot’s global sourcing operations and supply chain operations will remain with The ODP Corporation. Gerry Smith, current Office Depot CEO, will be CEO of The ODP Corp., the company said.
Office Depot’s consumer retail and SMB products and services will be spun off and be known as Office Depot. Kevin Moffit, currently executive vice president and chief retail officer of Office Depot, will be the CEO of Office Depot once the spin-off is complete.
Not included in the Office Depot split is the CompuCom systems integration and managed service business. ODP in January said it plans to sell CompuCom, which it acquired in 2017 for about $1 billion.
Office Depot rival, Staples, known formally by its corporate name as USR Parent, in January unveiled an attempt to acquire Office Depot in a deal worth $2.1 billion, which was a 61% premium over Office Depot’s average closing share price over the 90 trading days preceding the offer. ODP did not outright reject the acquisition bid.
However, Staples Inc. in its offer proposed that Office Depot divest itself of either its B2B or its CompuCom businesses, or both, as a way to increase the value of Office Depot. “We may increase our proposed valuation (i) for logical strategic divestitures that ODP may execute to unlock value, such as the sale of its CompuCom business and/or (ii) if ODP conducts a comprehensive sale process for its U.S. commercial business unit (the ‘B2B Business),” Staples wrote in an open letter at the time.
ODP’s non-executive Chairman Joseph S. Vassalluzzo, in a prepared statement, 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.”