Mergers and Acquisitions

Office Depot and OfficeMax

STUDENTS:
IOANA FLOREA
RUXANDRA PETCU

Description of the companies Office Depot

One of the world's largest sellers of office products

Founded: March 1986
Headquarters: Boca Raton, Florida, U.S.A.
Number of stores worldwide: 1.678.
Employees: 66.000 that serves customers in 60 countries

around the world.

Sales Channels : office supply stores, a contract sales force,
internet sites, direct marketing catalogues and call centers.

Description of the companies - OfficeMax

Provides office supplies and paper, technology products and

solutions, packaging supplies and equipment, health and hygiene

products, cafeteria supplies and machines, and furniture to large,
medium and small businesses, education providers and consumers
Founded: 1988
Headquarters: Naperville, IL, U.S.A.
Number of stores worldwide: 941.
Employees: 29,000 that serves customers in in 47 states, Puerto
Rico, the U.S. Virgin Islands and Mexico.
Sales Channels : field salespeople, outbound telesales, catalogs,
Internet, and office products stores.

Reasons for the merge

Office Depot decided to merge with OfficeMax lead by the

desire to get closer to Staples Inc., the largest U.S. officesupplies chain, as the sales started to go down in 2012.
The reason OfficeMax decided to merge with Office
Depot, was the companys need to survive as the
company started to lose sales to online rivals Office
Depot and Staples.
The results of 2012 marked the sixth year of falling
same-store sales for both companies.
The shares of both companies fell, with Office Depot
dropping the most since April 2010.

Stages of the merger

On February 13th 2013 Office Max and Office Depot announced

merger of equals to create $18 billion Global Office Solutions Company

On July 9th 2013 Office Depot closes sales of joint venture stake in
Office Depot de Mexico
On July 10th 2013 Office Depot and Office Max stockholders
approved merger of equals pursuant the agreement and the plan of
merger
On November 5th 2013 Office Depot and Office Max Incorporated
announced the completion of their merger of equals
On November 22nd 2013 Roland C. Smith was appointed as
Chairman and CEO
On 10th December has chosen Boca Raton, Fla. for its global
headquarters

Transaction details

The transaction was aimed to create a stronger, more

efficient global provider better able to compete in the

rapidly changing office solutions industry.
The combined company will also have significantly
improved financial strength and flexibility, with the
ability to deliver long-term operating performance and
improvements through its increased scale and
significant synergy opportunities.
Under the terms of the agreement, OfficeMax
stockholders will receive 2.69 Office Depot common
shares for each share of OfficeMax common stock.

Key strategic benefits of the transaction

Merger of equals structure.
Enhanced financial performance.
Significant synergy opportunities.
Financial strength and flexibility.
Increased scale and competitiveness.
Broader global footprint.
Improved customer experience to build

brand loyalty.
Accelerated innovation.

The integration process

Office Depot and OfficeMax continue to partner

closely with The Boston Consulting Group, a global

management consulting firm that was retained in
May to provide integration support.
An Integration Management Office (IMO) has been
established to guide day-to-day integration design
and planning, ensure interdependencies and risks
are identified, and make certain that mitigation
plans are developed.

Office Depot and Office Max complete merger Transaction information

OfficeMax is now a wholly owned subsidiary of Office Depot, Inc. and will no longer

be publicly traded.
In total, approximately 240 million shares of Office Depot, Inc. common stock were
issued to OfficeMax shareholders, representing approximately 45 percent of the 530
million total shares outstanding.
The combined company will use the name Office Depot, Inc. and will trade on the
New York Stock Exchange under the symbol ODP. Office Depot, Inc.
The new Office Depot, Inc., which would have had combined revenue for the 12
months ended September 28, 2013 of approximately $18 billion, now employs
about 66,000 associates worldwide.
The company serves consumers and businesses in 59 countries with more than
2,200 retail stores, award-winning e-commerce sites, and a dedicated business-tobusiness sales organization all delivered through a global network of wholly
owned operations, joint ventures, franchisees, licensees and alliance partners.
The companys portfolio of leading brands includes Office Depot, OfficeMax,
OfficeMax Grand & Toy, Viking, Ativa, TUL, Foray, and DiVOGA.

Consolidated results

Office Depot, Inc. results for the first quarter of 2014 include the

financial results from OfficeMax, whereas reported first quarter

2013 results include only the financial results of Office Depot.
In the first quarter of 2014, Office Depot reported an operating
loss of $79 million and a net loss attributable to common
stockholders of $109 million, or $0.21 per share.
Adjusted operating income for the first quarter of 2014, increased
33% to $72 million compared to combined pro forma adjusted
operating income of $54 million in the first quarter of 2013, and
adjusted net income attributable to common stockholders
increased 111% to $38 million, or $0.07 cents per share, compared
to combined pro forma adjusted net income of $18 million, or
$0.03 cents per share, in the first quarter of 2013.

Consolidated results

One year anniversary of the Office Depot/OfficeMax

merger
Overall, the first year as a new company has been a huge success.
Office Depot has increased its outlook for full year 2014 adjusted operating

income to a range of $255 million to $265 million.

The company recently reviewed its top priorities, including its four pillars: IT
platform, common assortment, marketing platform and supply chain approach,
which have enabled key merger milestones.
The first milestone was the completion of the first distribution center
consolidation and platform conversion.
The second milestone was the successful launch of co-branded e-commerce
website.
The third milestone was the first conversion of a legacy OfficeMax store to
the Office Depot point-of-sale platform.
The fourth milestone, the retailer successfully executed a combined banner,
integrated Back to School program in its retail stores by leveraging its progress
on common assortment to significantly reduce marketing spend.