Merger of Office Depot Inc (ODP) Supply Retailers? – OfficeMax Inc (OMX)

Page 1 of 2

In late February, U.S. office-supply rivals OfficeMax (NYSE:OMX and Office Depot Inc (NYSE:ODP) made the exciting but largely expected announcement that they were in advanced talks to execute a so-called “merger of equals.” Their combination would create a company with annual revenues of around $18 billion and an employee count of nearly 60,000. The announcement comes after a difficult year for both companies. Facing significant declines in revenues and earnings as well as uncertain future prospects in an increasingly competitive office-supply space, Office Max and Office Depot appear to have had little choice but to combine.

Office Depot Inc (NYSE:ODP)It is important to note that the combined company would still be smaller than dominant U.S. office-supply outfit Staples, Inc. (NASDAQ:SPLS) . Staples has a market cap of $9 billion and sales of $24 billion. The market cap of the combined company would be about $2 billion. However, this fact should not stop interested investors from taking a closer look at this deal. If nothing arises to delay or scuttle the proposed all-stock combination, it could close by the end of the third quarter of 2013.

About Office Max and Office Depot

Naperville, Illinois-based Office Max operates nearly 1,000 retail office-supply stores in the United States, Caribbean and Mexico. The company sells a wide range of disposable office supplies like paper goods, pens, pencils, staplers, stationery and binders as well as more durable goods like filing cabinets, furniture, technology hardware and printing supplies. Many of its outlets offer full-service printing centers as well as pay-per-minute computer terminals. OfficeMax (NYSE:OMX) distributes a catalog to its business clients and maintains a network of salespeople to execute direct-sales orders for larger customers. The company employs about 19,000 people and earned $414.7 million on gross 2012 revenues of about $6.9 billion.

Boca Raton, Florida-based Office Depot operates in many of the same business areas as its merger partner. In addition to the enterprises and product offerings described above, Office Depot Inc (NYSE:ODP) also maintains a sizable food-and-beverage division that provides its business-to-business clients with water coolers, bulk coffee, snacks and other wholesale refreshments for break rooms, lobbies, waiting rooms and other business-related gathering spaces. The company runs nearly 2,000 outlets in North America and the Caribbean. It also maintains supply contracts and sells branded products to office-supply stores in Asia, the Middle East and Latin America.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!