InfoSpace soars on news of segment sale
InfoSpace, Inc. (Nasdaq: INSP) shares are soaring in pre-market trading after the Internet search operator announced that its board of directors approved the sale of its online directory business 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,” CEO Jim Voelker said in a statement. “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.”
Texas-based Idearc publishes yellow pages directories in 35 states. The acquisition gives Idearc control of Switchboard.com and other online directory assets. Idearc said the deal is expected to close within 60 days.
Upon completion of the transaction, InfoSpace said it expects to return the net proceeds from the sale to shareholders as a special cash distribution.
In pre-market trading, InfoSpace shares are hitting a year high, up 27%, or $3.64, at $16.89. Over the last 52 weeks, shares of the small cap have ranged from $12.56 to $27.76.
