Dex One, a provider of yellow pages and online marketing services in numerous markets around the country, is merging with SuperMedia.
Combined, the two firms generate some $3.1 billion in annual revenue.
The merger news sent Dex One shares soaring in early trading some 22 percent, or 27 cents, to $1.51. Shares closed at $1.24 on Monday. Shares soared Tuesday some 45 percent to $1.80 in late-morning trading.
Once the merger is complete, Dex One’s CEO will step down.
The company has some 300 employees in the Triangle.
The chairman of Dex One will oversee the merged operations, which will be called Dex One.
The CEO of SuperMedia, which is based in Dallas, will serve as CEO of the combined company.
Dex One (NYSE: DEXO) and SuperMedia (Nasdaq: SPMD) announced the planned one-for-one stock merger early Tuesday.
SuperMedia shares closed Monday at $2.58. Its shares vaulted more than 50 percent after the deal was announced to $3.94.
After the close, Dex One shareholders will own some 60 percent of the venture.
The deal is likely to lead to layoffs as the companies noted in the announcement that a merger will produce “significant synergies” – a term for cost savings.
“The combined company estimates it will realize $150-$175 million of annual run rate cost synergies by 2015 due to scale efficiencies; rationalization of duplicative solutions, products and vendor relationships; headcount reductions; and adoption of the most cost effective management and operating practices and technology platforms and systems from Dex One and SuperMedia,” the firms said in the announcement.
Among those who will lose a job is Alfred Mockett, the CEO of Dex One. Peter McDonald, the CEO of SuperMedia, will be the top executive once the merger is complete.
Alan Schultz, the Dex One board chair, will direct the combined company of some 5,800 employees.
“We believe this merger is in the best interests of shareholders, lenders, customers, employees and consumers,” Schultz said in a statement.
“Dex One and SuperMedia are closely aligned with a solid value proposition for local businesses, and we expect the transaction to generate significant operational and financial synergies, which will create additional investor value,” he added.
Formerly known as R.H. Donnelley, Dex One emerged from bankruptcy in 2010 and Mockett was named CEO shortly thereafter.
The company has embraced the Internet aggressively as online advertising has transformed the yellow pages business. SuperMedia has gone through a similar transformation.
“For the past two years, Dex One and SuperMedia have been on the same path of transformation, fully embracing digital media to help businesses grow through a complete suite of marketing solutions provided by our local consultants,” McDonald said in the merger announcement.
“Our common goal over many decades has been to drive results for local advertisers,” he added. “By joining together, we will have nationwide presence to increase market share and achieve operating and service efficiencies. Having spent time in my career at Dex One and SuperMedia, I know that the great attitudes, best thinking and best practices of the talented individuals at both companies will combine to enhance the value we deliver to our clients and investors.”
Dex One and SuperMedia both filed for bankruptcy in 2009.
SuperMedia was spun out of Verizon in 2006.