September 17, 2007 - 7:50 AM EST
InfoSpace to Sell Online Directory Business for $225 Million in Cash
Transaction Unlocks Value of Directory Business, Capitalizes on NOL and Reinforces Company’s Focus on Shareholder Value Creation
InfoSpace, Inc. (NASDAQ:INSP) today announced that its Board of Directors has unanimously approved a definitive agreement under which InfoSpace will sell its online directory business, including the Company’s online yellow and white pages services, to Idearc Inc. (NYSE:IAR), for $225 million in cash.
“The sale of our directory business is part of the Board of Directors’ ongoing review of our company and the opportunities available to enhance value for our shareholders,” said Jim Voelker, Chairman and Chief Executive Officer of InfoSpace. “In addition to unlocking the value of our director business that was not reflected in the Company’s market valuation, this transaction is extremely tax efficient, allowing us to capitalize on our net operating losses to significantly maximize the cash proceeds from the sale.”
The transaction is expected to be completed by the end of 2007 upon the satisfaction of customary closing conditions and regulatory approvals.
Upon completion of the transaction, the Company expects to return the net proceeds from the sale to shareholders as a special cash distribution. The Company will utilize a portion of its net-operating loss carry-forwards to offset substantially all of the taxable gain resulting from the sale, increasing the cash available for distribution to shareholders. At closing, InfoSpace’s cash position is expected to be in excess of $400 million.
Credit Suisse Securities (USA) LLC is acting as financial advisor and Wilson Sonsini Goodrich & Rosati is acting as legal counsel to InfoSpace in connection with the transactions.
About InfoSpace’s Online Directory Business
InfoSpace’s online directory business helps Internet users find local and national merchants and individuals in North America. It offers directory services through InfoSpace’s branded Web sites, such as Switchboard.com and InfoSpace.com, as well as through distribution partner relationships. Partner versions of InfoSpace’s directory services are generally private-labeled and delivered with each distribution partner’s unique requirements. The vast majority of the revenue from this business is generated from the Switchboard.com site that was acquired by InfoSpace in 2004 for approximately $103 million. For the first half of 2007, this business had revenues of 17.2 million. The business employs approximately 50 people.
About InfoSpace®
InfoSpace, Inc. is a leading developer of tools and technologies to help people discover and enjoy content and information – whether on a mobile phone or on the PC. InfoSpace uses its proprietary metasearch technology to power a portfolio of branded Web sites, including Dogpile (www.dogpile.com) and Zoo (www.zoo.com), a kid-friendly search engine, and provide private-label search and online directory services to consumers on a global basis. The company’s mobile platform and applications, such as InfoSpace Find It! (www.infospacefindit.com), create revenue opportunities for carriers, while satisfying consumer demand for a highly relevant mobile user experience. More information can be found at www.infospaceinc.com.
