NEW YORK (TheStreet) -- Office Depot
(ODP - Get Report) has named Roland Smith as its new CEO and Chairman, following its successful merger with OfficeMax
(OMX). Smith, most recently chief executive of Delhaize America
(DEG - Get Report), has been picked for his merger experience and expertise in saving businesses in crisis.
"Smith comes to Office Depot, Inc. with a strong retail track record of increasing operating profit, managing complex integrations, directing corporate turnarounds, and transforming companies for future success," the company wrote in a statement.
In his most recent role as CEO of the U.S. arm of Delhaize Group, Smith was responsible for consolidating the company's supermarket chains such as Food Lion and Hannaford. He also led the sale of the less profitable Sweetbay, Reid's and Harveys brands to Bi-Lo Holding for $265 million in May.
Prior to that, Smith orchestrated the successful merger of Wendy's and Arby's in 2008 during his tenure as CEO of Arby's and post-merger The Wendy's Company
(WEN - Get Report).
One of his first decisions in the top job will be where to locate the merged corporate headquarters: in OfficeMax's Illinois offices or Office Depot's in Boca Raton, Fla. As The Wall Street Journal
notes, it could come down to which state offers the best tax position (Illinois currently has one of the highest tax rates in the U.S. at around 9.5% compared to Florida's 5.5%).
A week ago, the stationery stores completed their long-awaited merger, finalizing plans set in motion when the companies announced their intentions in February. The merger is expected to create an office supplies powerhouse with combined annual sales of around $17 billion.
Office Depot's Neil Austrian and OfficeMax's Ravi Saligram, named interim co-CEOs and at one time included in the CEO search, have resigned from the company and board.
Shares had climbed 3.8% to $5.41 by mid-afternoon, adding to the 64.6% gains in the year to date.
Ratings team rates Office Depot Inc as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate Office Depot Inc (ODP) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."
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