‘Max makes CEO choice
Sam Duncan’s successor has a hospitality and food services background
The International President of food services company Aramark has been named as the successor to retiring OfficeMax CEO, Sam Duncan.
Ravi Saligram will officially take over from Duncan on 8 November, while Duncan himself will stay on as a special advisor to the company until 28 February 2011.
54-year-old Saligram has been President, International at Aramark since 2003. Prior to that he spent a number of years at the InterContinental hotel group, where he held a number of executive roles both in North America and internationally.
His appointment at OfficeMax could be regarded as something of a surprise, given his strong background in the hospitality and consumer services industries.
Following Duncan’s retail background, it had been suggested that the new CEO would have more B2B experience.
Commenting on Saligram’s appointment, Duncan said: "I believe that his knowledge and expertise in managing professional services operations and growing businesses and brands make him an excellent choice to lead OfficeMax through its next phase."
What that "next phase" will be remains open to speculation. ‘Max’s share price had jumped 10 percent in the days prior to Saligram’s appointment, following a JP Morgan analyst’s report suggesting that the company would be a prime target for a private equity buyout. That comes after strong rumours within the North American OP industry earlier this year that OfficeMax and Office Depot were holding exploratory merger talks.
Could Saligram’s appointment be designed to keep ‘Max in a holding pattern while its long-term future is decided?
Possibly, but Citigroup analyst Kate McShane viewed the announcement as a "net positive" as it removes the uncertainty factor regarding management succession, although she did add the caveat that this is "modestly offset" by the fact that Saligram is not widely known to investors.
McShane added that Saligram’s prior experience in distribution and logistics might have been a differentiating point in the selection process, especially as the delivery/service side of the business becomes more important and possibly a bigger part of the mix.
In addition to the appointment of Saligram, OfficeMax announced that current Director, Rakesh Gangwal, has been named Non-Executive Chairman of the Board, also effective 8 November.
‘Max makes CEO choice