Telstra Sells 70% Stake in Telephone Directories Subsidiary
Published on: 12th Jan 2014
By: Ian Mansfield
Australia's Telstra is selling a 70 percent stake in its directories business Sensis to US based private equity firm Platinum Equity for A$454million (USD408 million).
The sale excludes the voice services business and includes economic benefits to Telstra from services it will continue to provide to Sensis. Telstra will retain a 30 percent shareholding with Sensis now valued at A$649million.
Chief Executive Officer, David Thodey said he was committed to the new partnership and believed the agreement was the right strategic fit for both Telstra and Platinum Equity. He said the new partnership would maximise the value of the Sensis asset for Telstra shareholders.
"Platinum Equity will operate Sensis as a separate entity, giving it the focus it needs to extend and enhance customer offerings and benefits in an agile digital world."
The transaction price is equal to a multiple of 2.4 times Sensis' FY14 forecast EBITDA after adjusting for the voice directories business (which is being retained by Telstra) and stand alone costs of operating the business.
Telstra expects to book an accounting loss on Sensis of approximately A$150million subject to completion timing and adjustments.
Post completion Telstra will record its future share (30%) of Sensis net profit after tax in its EBITDA. The value of Telstra's retained shareholding incorporates the impact of debt financing for the acquisition.
"The fact that we have retained a 30 per cent stake in Sensis shows our belief it will continue to lead the market and deliver value to Telstra shareholders," said Mr Thodey.
Sensis will continue producing and distributing the White Pages Directory as required under conditions of Telstra's Carrier Licence.