Dex One Corporation and SuperMedia announced that each company has received the requisite shareholder approval for their proposed merger and they both have voluntarily filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware to implement “pre-packaged” Plans of Reorganization.
Dex One and SuperMedia intend to use this strategic process to facilitate the completion of their merger announced on Aug. 21, 2012. The operations of both companies are expected to continue without interruption during the restructuring process. Subject to Court approval of the plans, the companies believe the merger will be completed within 45 to 60 days. These plans intend to preserve the interests of all investors without any impairment to existing Dex One or SuperMedia equity holders and Dex One note holders.
“This process will facilitate the completion of our merger with Dex One and ensure the financial and strategic benefits of the merger identified and communicated previously remain unchanged,” said Peter McDonald, president and CEO of SuperMedia. “A substantial majority of our lenders and stockholders have pledged their support for this transaction and we remain committed to closing it in the first half of this year. The new company will be the trusted marketing consultant to help local businesses across the United States grow.”
“This combination is good for customers, investors, consumers and employees, and creates a stronger company that can penetrate more of the local marketplace,” said Alfred Mockett, CEO of Dex One. “By joining two industry leaders to create a national provider of social, local and mobile marketing solutions, we believe Dex One and SuperMedia will accelerate the transformation of the newly combined company and be positioned to deliver outstanding service and support. Throughout the merger process, the employees from both companies have demonstrated great dedication, and remain focused on exceeding the needs of local businesses in the markets we serve.”
Pursuant to the proposed plans, Dex One and SuperMedia do not need, nor intend to obtain debtor-in-possession (DIP) financing during the reorganization. The companies maintain substantial cash balances and continue to generate positive cash flow.
Dex One and SuperMedia have filed a series of motions with the Court to ensure the continuation of normal operations, including requesting Court approval to continue paying employee wages and salaries and providing employee benefits without interruption. The companies also are seeking Court authorization to continue paying vendors, suppliers and service providers in full under customary terms for all goods and services, including those provided before the filing date. The companies expect the Court to approve these requests shortly.
Houlihan Lokey Capital Inc. is acting as financial advisor to Dex One, and Kirkland & Ellis LLP is acting as its legal counsel. Morgan Stanley & Co. LLC is acting as financial advisor to SuperMedia for the merger, and Fulbright & Jaworski L.L.P and Cleary Gottlieb Steen & Hamilton LLP are acting as legal counsel to SuperMedia. Chilmark Partners is acting as financial advisor to SuperMedia’s board of directors.