WINNIPEG – The strategizing continues at MTS Allstream.
The company announced today it has agreed to sell its directories business to Yellow Pages Group Co. for $281 million, of which $275 million will be payable in cash on closing. MTS’s directory business had total revenue and EBITDA of $42 million (including inter-company services) and $23 million respectively.
“This transaction is a clear sign of our commitment to create and deliver long term value for our shareholders,” said Pierre Blouin, CEO. “Our directory business is performing strongly, but as a publishing enterprise it is outside the scope of our core telecommunications franchise. With this transaction we are maximizing the value of this asset and sharpening MTS Allstream’s focus on opportunities in our core consumer markets and enterprise solutions businesses, while ensuring the directory publishing operation is well positioned to continue to provide excellent service going forward.”
MTS Allstream Inc. publishes 11 different White Pages and Yellow Pages directories across Manitoba, and operates the www.mtsyellowpages.com directory advertising portal. Pursuant to a long term publication agreement to be entered into on closing of the transaction, Yellow Pages Group will continue to publish White Pages directories in Manitoba on behalf of MTS.
“Yellow Pages Group is a national leader in the directory business (it owns Bell Canada’s books), serving Canada’s largest business and residential directory markets,” added Blouin. “They are leaders in this field, and they have the experience to ensure this transaction is seamless and transparent for customers in Manitoba.”
Under the terms of the agreement, Yellow Pages Group will offer employment to all MTS Allstream Inc. directory employees.
Blouin added the company will evaluate the best use of the proceeds of this transaction as part of its ongoing business review.
The transaction has been approved by the MTS board of directors and the company expects the transaction to close in the fourth quarter of 2006. It is subject to customary conditions, including approval by the Competition Bureau.
