Dex One, a provider of yellow pages and online marketing services based in Cary, could lay off some of its 300 Triangle workers and also might relocate its headquarters to Texas as the result of a planned merger with Internet and yellow pages rival SuperMedia.
The deal was announced early Tuesday.
In response to questions from WRAL News, DexOne spokesperson Chris Hardman said job cuts and a possible move of the headquarters to Dallas where SuperMedia is located are both possible.
The firms “are looking at workforce reductions in the 10-15 percent range across the company,” Hardman explained. “There are approximately 5,800 combined in the two companies today.”
Specific details remain to be worked out, he added.
“We’ve only just announced the transaction and no decisions have been made at this time,” Hardman said. “We will carefully study the opportunities to combine these two great companies in a manner that builds on our collective past successes, and enables us to create a great organization going forward.
“The exact number of positions to be impacted will be determined through the merger integration process.”
Asked where the combined firm’s headquarters would be, Hardman replied: “A decision regarding the location of the new company’s headquarters and other principal locations will be made during the course of merger integration planning.”
Asked if affected workers involved by any headquarters move would be offered the opportunity to transfer, Hardman responded: “This may be a possibility.”
News about any moves and layoffs are not expected any time soon, however.
“Decisions will be made during the merger integration process and will be made after the transaction closes, which is expected to be in the fourth quarter of 2012,” Hardman said.
Combined, the two firms generate some $3.1 billion in annual revenue. 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.
In the announcement of the merger, the firms wrote, “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.”
Among those who will lose a job is Alfred Mockett, the CEO of Dex One. He will step down once the merger is complete. Peter McDonald, the CEO of SuperMedia, will be the top executive of the combined company, which will continue the Dex One name. Alan Schultz, the Dex One board chair, will direct the combined company of some 5,800 employees.
Dex One (NYSE: DEXO) and SuperMedia (Nasdaq: SPMD) shares soared on the news. In early trading Dex climbed some 22 percent, or 27 cents, to $1.51 in pre-market trading. Shares closed at $1.24 on Monday. Ninety minutes after the markets opened, shares traded up 45 percent, or 56 cents, at $1.80.
Shares finished the day up 31 percent to close at $1.63.
SuperMedia shares closed Monday at $2.58 and soared more than 50 percent to $3.94 in late-morning trading. At the close, SuperMedia finished up 42 percent at $3.64.
After the deal closes, Dex One shareholders will own some 60 percent of the venture.
“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.