The pending merger between Cary-based Dex One and SuperMedia will cost the Triangle a corporate headquarters.
The two yellow pages publishers, which announced their merger last month, have decided that the combined company’s headquarters will be in Dallas, the home base of SuperMedia, according to an internal announcement obtained by The News & Observer.
“Working together, the leadership teams of Dex One and SuperMedia have determined that the best location for our headquarters will be at the current SuperMedia headquarters complex at the Dallas-Fort Worth airport,” stated an email message that went out Thursday afternoon. It was signed by the CEOs of the two companies, Dex’s Alfred Mockett and SuperMedia’s Peter McDonald.
The Dallas site “provides a campus-style setting to encourage employee interaction and teamwork, flexibility to accommodate additional staffing and competitive facilities costs,” they wrote.
The CEOs also said that an internal analysis found that choosing Dallas would minimize the number of employees that needed to be relocated. Dallas is home to 800 SuperMedia workers; Dex has about 165 workers at its Cary headquarters and 300 overall in the Triangle.
The decision undoubtedly is bad news for the Dex employees based in Cary, although the impact on jobs is unclear.
Dex spokesman Tyler Gronbach said that the two companies are still in the early stages of mapping out the integration of the two companies. “We fully expect to maintain a presence in the Triangle,” he said.
An undetermined number of local employees also will be offered jobs in Dallas.
“Relocation is certainly going to be part of the process,” Gronbach said. “That is going to be determined on a job-by-job basis.”
Dex employees have been braced for job cuts. Mockett previously said that he expected the merger to trigger cutbacks of between 10 percent and 15 percent of the workforce.
Both Dex and SuperMedia have been struggling.
The one-two punch of the economic downturn plus advertisers shifting their spending from print to digital media hit the entire industry hard.
Both companies filed for bankruptcy in the wake of the recession and emerged with new names and lower – but still considerable – debt.
Both companies have been expanding their digital advertising business, but that segment isn’t growing fast enough to compensate for declining print revenue. Dex publishes more than 800 yellow pages directories, while SuperMedia publishes more than 1,000.
Corporate headquarters are coveted not only for the jobs directly involved but also for their indirect impact. Companies tend to work with legal and accounting firms and other professionals that are nearby. In addition, being home to a major company entails bragging rights and are used by economic developers to recruit other companies to the region.
The decision to base the combined company, which will be called Dex Media, in Dallas also means that what was billed as a merger of equals is looking like a corporate takeover by SuperMedia.
Although Dex shareholders will own a 60 percent share of the new company, the management of the combined company has been weighted toward SuperMedia from the day the deal was announced. SuperMedia’s McDonald will be the CEO, and the chief financial officer will be Samuel “Dee” Jones, currently SuperMedia’s CFO.
“We still have yet to determine the final composition of the management team,” Gronbach said.
“There are lots of pieces of the puzzle that still need to come together.”
Mockett, who became Dex’s CEO in the fall of 2010, is stepping down after the deal closes, which is expected to occur before the end of the year.
Dex’s chairman, Alan Schultz, will be chairman of the Dex Media board.