Marchex To Maintain Archeo As A Division; Announces 2014 Dividend Plan Based On Archeo Cash Generation
Inc. (NASDAQ:MCHX), a leader in mobile performance advertising,
today announced that it will not pursue a spin-off of its
domains-related assets into a stand-alone, publicly-traded company at
Marchex, Inc. (NASDAQ:MCHX), a leader in mobile performance advertising, today announced that it will not pursue a spin-off of its domains-related assets into a stand-alone, publicly-traded company at this time and that Archeo will continue to operate as an independent division of Marchex. Marchex came to this conclusion as part of a recent strategic review. The review began this summer after Marchex sold certain pay-per-click assets, which were operating under Archeo, in July. Marchex sold the assets to help sharpen Archeo’s focus and market opportunity around domains, but as a result, Archeo’s overall financial profile became smaller. The review determined that the incremental costs and complexities associated with taking Archeo public at this time would be prohibitive, and that Archeo’s value to shareholders is best recognized as a segmented division of Marchex. “This is the right decision for Marchex and our shareholders,” said Russell Horowitz, Chief Executive Officer and Chairman of Marchex. “Archeo has tremendous asset value and we will continue to consider various strategic options. In the meantime, this decision frees up valuable resources and allows us to direct Archeo’s positive cash flow to both build Marchex’s balance sheet and fund Archeo’s growth initiatives.” Archeo, which earlier this month announced the launch of its Archeo Domains Marketplace, will continue to execute on its business strategy of building a vibrant and transparent ecosystem for buying and selling domains. The new online marketplace provides direct access to Archeo’s portfolio of more than 200,000 premium domain names available for sale. Marchex also announced today that its Board of Directors has approved a plan to allocate a portion of Archeo’s cash flow to fund an ongoing quarterly Marchex shareholder dividend, subject to capital availability. Marchex anticipates it will fund a $0.02 per share quarterly dividend beginning in the first quarter of 2014. The aggregate quarterly dividend for the first quarter of 2014 is estimated at approximately $720,000. This dividend plan replaces, and depending on Archeo’s cash generation, may increase and potentially exceed Marchex’s prior dividend, which was put in place in November, 2006.
Looking at the universe of stocks we cover at Dividend Channel, on 2/4/15, Marchex Inc will trade ex-dividend, for its quarterly dividend of $0.02, payable on 2/17/15. As a percentage of MCHX's recent stock price of $3.83, this dividend works out to approximately 0.52%, so look for shares of Marchex Inc to trade 0.52% lower — all else being equal — when MCHX shares open for trading on 2/4/15.