Platinum buys Australia directories business Sensis
US private equity firm Platinum Equity has reached an agreement with Telstra Corporation, Australia's biggest phone company, to acquire a 70% stake in its directories business Sensis for A$454 million ($407.17 million).
Sensis publishes a range of print and online directories including the White Pages and the Yellow Pages. According to a release, the deal values the unit at A$649 million - representing 2.4x Sensis' forecast EBITDA for financial year 2014. Telstra will retain a 30% stake.
The business had previously been valued at around A$3 billion, however it has struggled due to an increase in online competition worsened by the proliferation of smartphone technology. The company's revenue fell 11.4% over the last financial year; with an 11.3% growth in digital media revenue offset by a 19.9% slide in print revenue. As a result, Sensis has already undertaken restructuring, including the axing of nearly 700 positions last February.
Following the deal, Sensis will continue producing and distributing the White Pages Directory and Telstra will also continue to provide directory assistance services, as required under conditions of Telstra's Carrier Licence.
"We have had great collaboration with Telstra and we believe the partnership will provide Sensis a level of consistency that is good for the business as it transitions to a standalone enterprise," said Tom Gores, chairman and CEO, Platinum Equity Chairman. "We will empower management's focus on the core directories business while evaluating and pursuing prospective new strategic initiatives."
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