EmailDex One (DEXO $1.78 +0.51) and SuperMedia (SPMD $3.69 +1.11) announced that their Boards of Directors have approved a definitive agreement under which Dex One and SuperMedia will 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. Upon closing of the transaction, DEXO shareholders are expected to own ~60% and SuperMedia shareholders are expected to own approximately 40% of the combined company. The business will benefit from improved operating scale, significant synergies and enhanced cash flow.
On a pro-forma basis, for 2011, the combined co would have reported $3.1 billion in revenue, $778 million in non-GAAP operating income (adjusted to exclude impairment charges of $1.8 billion) and $1.2 billion in non-GAAP adjusted EBITDA. Pro-forma cash from operations for 2011 would have been $657 million, and non-GAAP free cash flow would have been $610 million. For the first half of 2012, the combined co would have reported pro-forma revenue of ~$1.4 bln, $290 mln in operating income and $586 mln in non-GAAP adjusted EBITDA. First half 2012 pro-forma cash flow from operations for the combined co would have been $340 mln and non-GAAP free cash flow for the period would have been $322 million.
