Dex One and SuperMedia File Pre-Packaged Plans of Reorganization as Part of Merger Process
March 18 2013 - 4:00AM
Business Wire
Dex One Corporation (NYSE: DEXO) and SuperMedia Inc. (NASDAQ:
SPMD) today 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 (the “Court”), 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.
Both companies intend to work with their respective exchanges to
remain listed during the restructuring.
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.
For access to court documents and other general information
about the pre-packaged plans cases, visit www.epiq11.com/dexone or
www.epiq11.com/supermedia.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release regarding Dex
One Corporation’s (“Dex One”) future operating results,
performance, business plans, prospects, guidance, statements about
the benefits of the proposed merger with SuperMedia Inc.
(“SuperMedia”) and the combined company, and any other statements
not constituting historical fact are "forward-looking statements"
subject to the safe harbor created by the Private Securities
Litigation Reform Act of 1995. Where possible, the words "believe,"
"expect," "anticipate," "intend," "should," "will," "would,"
"planned," "estimated," "potential," "goal," "outlook," "may,"
"predicts," "could," or the negative of such terms, or other
comparable expressions, as they relate to Dex One, SuperMedia or
their respective management, have been used to identify such
forward-looking statements. All forward-looking statements reflect
only Dex One's and SuperMedia’s current beliefs and assumptions
with respect to future business plans, prospects, decisions and
results, and are based on information currently available to Dex
One and SuperMedia. Accordingly, the statements are subject to
significant risks, uncertainties and contingencies, which could
cause Dex One's, SuperMedia’s or the combined company's actual
operating results, performance or business plans or prospects to
differ materially from those expressed in, or implied by, these
statements.
Factors that could cause actual results to differ materially
from current expectations include risks and other factors described
in Dex One's and SuperMedia's publicly available reports filed with
the SEC, which contain discussions of various factors that may
affect the business or financial results of Dex One, SuperMedia or
the combined company. Such risks and other factors, which in some
instances are beyond either company's control, include: the
continuing decline in the use of print directories; increased
competition, particularly from existing and emerging digital
technologies; ongoing weak economic conditions and continued
decline in advertising sales; the companies' ability to collect
trade receivables from customers to whom they extend credit; the
companies' ability to generate sufficient cash to service their
debt; the companies' ability to comply with the financial covenants
contained in their debt agreements and the potential impact to
operations and liquidity as a result of restrictive covenants in
such debt agreements; the companies' ability to refinance or
restructure their debt on reasonable terms and conditions as might
be necessary from time to time; increasing interest rates; changes
in the companies' and the companies' subsidiaries credit ratings;
changes in accounting standards; regulatory changes and judicial
rulings impacting the companies' businesses; adverse results from
litigation, governmental investigations or tax related proceedings
or audits; the effect of labor strikes, lock-outs and negotiations;
successful realization of the expected benefits of acquisitions,
divestitures and joint ventures; the companies' ability to maintain
agreements with major Internet search and local media companies;
the companies' reliance on third-party vendors for various
services; and other events beyond their control that may result in
unexpected adverse operating results.
With respect to the proposed merger, important factors could
cause actual results to differ materially from those indicated by
forward-looking statements included herein, including, but not
limited to, the ability of Dex One and SuperMedia to consummate the
transaction on the terms set forth in the merger agreement; risks
related to the impact that either Dex One’s or the SuperMedia’s
voluntary case under Chapter 11 of title 11 of the United States
Code, filed to consummate the transaction, could have on our
business operations, financial condition, liquidity or cash flow;
the risk that anticipated cost savings, growth opportunities and
other financial and operating benefits as a result of the
transaction may not be realized or may take longer to realize than
expected; the risk that benefits from the transaction may be
significantly offset by costs incurred in integrating the
companies; potential adverse impacts or delay in completing the
transaction as a result of bankruptcy cases; and difficulties in
connection with the process of integrating Dex One and SuperMedia,
including: coordinating geographically separate organizations;
integrating business cultures, which could prove to be
incompatible; difficulties and costs of integrating information
technology systems; and the potential difficulty in retaining key
officers and personnel. None of Dex One, SuperMedia or the combined
company is responsible for updating the information contained in
this release beyond the publication date, or for changes made to
this document by wire services or Internet service providers.
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