Dex One and SuperMedia complete merger, exit bankruptcy as Dex Media

By Caroline Salls

Pittsburgh, April 30 - Dex One Corp. and SuperMedia Inc. completed their merger and emerged from Chapter 11 bankruptcy on Tuesday, according to a news release.

The merger created Dex Media, Inc. The common stock of the merged company will begin trading on May 1 on Nasdaq under the symbol "DXM".

"Dex Media is positioned to help businesses across the country grow, with over 2,700 marketing consultants already advising approximately 665,000 local businesses across social, local and mobile media," Dex Media president and chief executive officer Peter McDonald said in the release.

"We intend to seize the opportunity to create additional value for existing and new clients, employees and investors."

Dex Media chairman of the board Alan Schultz said in the release, "This combination establishes Dex Media as a powerful marketing services company with digital revenue approaching $500 million and a near national footprint.

"The company plans to leverage its strong free cash flow generation, expense synergies and tax assets to build on its offline foundation to offer effective marketing solutions and reduce debt."

Dex Media will realize an estimated $150 million to $175 million of annual run rate cost synergies by 2015 and expects to preserve access to Dex One's remaining tax attributes and generate future attributes, totaling as much as $1.8 billion, to offset income attributable to the combined company following the completion of the transaction, the release said.

Merger details

Under the merger agreement, legacy Dex One shareholders received 0.2 shares for each Dex One share they owned, and legacy SuperMedia shareholders received 0.4386 shares for each SuperMedia share they owned.

Dex One shareholders now own about 60% and SuperMedia shareholders about 40% of Dex Media's newly issued common stock.

While the corporate entity will be called Dex Media, the company said the Dex One and SuperMedia brands, client-facing operations and communications will continue under the Dex One and SuperMedia brand names. Dex Media headquarters are in Dallas.

As previously reported, each of Dex One's and SuperMedia Inc.'s pre-packaged plans of reorganization, which took effect April 30, were confirmed by the U.S. Bankruptcy Court for the District of Delaware on April 29.

Dex One creditor treatment

Creditor treatment under the Dex One plan includes the following:

• Senior subordinated notes claims will be reinstated;

• Holders of secured credit facility claims will receive a portion of the loans under the amended and restated credit agreements, as well as specified cash payments;

• Holders of general unsecured claims will be paid in full in cash;

• Holders of Dex One interests will receive 0.2 shares of new common stock per allowed interest;

• Intercompany interests will be left unaltered and rendered unimpaired; and

• Holders of administrative claims, secured tax claims, other secured claims, priority tax claims, other priority claims and professional claims will be paid in full from cash on hand and the Dex One debtors' existing assets or be reinstated.

SuperMedia creditor treatment

Creditor treatment under the SuperMedia plan includes the following:

• Holders of administrative claims, professional claims, priority tax claims, other priority claims, general unsecured claims and secured tax claims will be paid in full in cash;

• Holders of other secured claims will either have their claims reinstated or receive the collateral securing the claims;

• Holders of SuperMedia credit facility claims will receive a share of the amended and restated credit agreement and a cash payment;

• Holders of SuperMedia interests will receive 0.4386 shares of new common stock for each allowed interest;

• Intercompany interests will be unaltered; and

• Holders of section 510(b) claims will either be paid in full in cash or be treated as interest holders.

Dex One is a Cary, N.C.-based marketing services provider. SuperMedia is a Dallas-based directory publisher. The companies filed for bankruptcy on March 18. Dex One's Chapter 11 case number is 13-10533 and SuperMedia's is 13-10545.

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