Telecom confirmed today that it is selling the Yellow Pages Group for NZ$2.24 billion. The buyer is a private equity consortium consisting of CCMP Capital and Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan.
The total value of NZ$2.24 billion represents NZ$2.165 billion cash settlement and approximately NZ$75 million of YPG debtors retained by Telecom.
CCMPA partner Stephen King and TPC senior vice-president Jim Leech say: “NZ Yellow Pages is one of the best businesses of its kind in the world. We look forward to working with management and staff to consolidate and extend its market-leading position”.
“[T]his transaction represents a significant outcome for Telecom shareholders. The Board is satisfied that the transaction fairly reflects the underlying value of the YPG business,” says Telecom chairman Wayne Boyd.
Telecom expects that the transaction will be completed by the end of April.
The sale to the CCMP-Teachers Private Capital partnership comes after speculation that a similar joint venture between US private equity firm Kohlberg Kravis Roberts & Co and Australia’s Seven Network was the leading contender.
The Wall Street Journal Online claims that a Telecom executive told it recently that “KKR is the front-runner … they are in a strong position to get the business.”
The CCMP-Teachers Private Capital and KKR-Seven Network partnerships were both shortlisted to put in final bids, along with a third partnership, between Pacific Equity Partners and Bain Capital.
Several other bidders, including Australia’s Telstra, were eliminated from the bidding before the shortlisting phase. Telstra retains ownership of Sensis, its own directory business.