Dex One Corp. (DEXO: Quote) and SuperMedia Inc. (SPMD: Quote) would combine in a stock-for-stock merger of equals, creating a national provider of social, local and mobile marketing solutions through direct relationships with local businesses. Following the transaction closure, Dex One shareholders are expected to own about 60 percent and SuperMedia shareholders are expected to own some 40 percent of the combined company.
Pursuant to the agreement, Dex One and SuperMedia shareholders would exchange their shares for shares in Dex Media. Dex One shareholders would receive 0.20 shares for each Dex One share they own, and Super Media shareholders would get 0.4386 shares for each SuperMedia share they own.
The combined company would have over 5,800 employees, including over 3,100 consultants who establish direct relationships with local business owners and offer a full suite of marketing solutions to help them retain and add customers. Initially, the combined company would have relationships with more than 700,000 businesses. The business would benefit from improved operating scale, significant synergies and enhanced cash flow.
On a pro-forma basis, for the full year 2011, the combined company would have reported $3.1 billion in revenue, $778 million in non-GAAP operating income and $1.2 billion in non-GAAP adjusted EBITDA. For the first half of 2012, the combined company would have reported pro-forma revenue of nearly $1.4 billion, $290 million in operating income and $586 million in non-GAAP adjusted EBITDA.
The combined company estimates it would realize $150 million - $175 million of annual run rate cost synergies by 2015 due to scale efficiencies; rationalization of duplicative solutions, products and vendor relationships; headcount reductions; and adoption of the most cost effective management and operating practices and technology platforms and systems from Dex One and SuperMedia.
SuperMedia and Dex One plan to file a joint proxy statement/prospectus with the Securities and Exchange Commission to submit the merger to their stockholders for approval. The transaction may close in the fourth quarter of 2012.
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by RTT Staff Writer
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