US marketing services firm Dex One Corp (NYSE:DEXO) and advertising agency SuperMedia Inc (NASDAQ:SPMD) said today that each of them had received shareholder approval for their planned combination and had voluntarily filed for a pre-packaged Chapter 11 bankruptcy protection to implement the merger.
The companies stated that the reorganisation plan would assist the progress of their merger, which was agreed in August last year and is now expected to be completed within 45 to 60 days, subject to court approval. The transaction, which was revised in December 2012 to include extended terms of the credit agreements, has also received approval by the majority of lenders, Dex One and SuperMedia said, adding that they had substantial cash balances and did not plan to seek debtor-in-possession financing during the reorganisation.
As part of the merger agreement, Dex One’s shareholders will receive 0.20 shares in the enlarged group for each of their units and SuperMedia’s stockholders will get 0.4386 shares for every single unit they own. As a result, the existing shareholders of Dex One will control some 60% of the combined company, while those of SuperMedia will hold a 40% stake. The combination is seen to create a stronger player with a better penetration of the local marketplace.
Houlihan Lokey Capital Inc and Kirkland & Ellis LLP serve as advisors to Dex One. SuperMedia is taking counsel from Morgan Stanley & Co LLC, Chilmark Partners, Fulbright & Jaworski LLP and Cleary Gottlieb Steen & Hamilton LLP.