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The Kelsey Report® Advisory

RHD and Dex Media: A Marriage in the Making?
Charles Laughlin , 9/23/2005

SUMMARY: On Wednesday, the Wall Street Journal, citing confidential sources, reported that R.H. Donnelley was pursuing the acquisition of Dex Media. Without missing a beat, the financial community weighed in, driving down the price of both stocks, and some banks issued downgrades on one or both of the publicly traded companies. The two companies have not commented publicly on the report, nor do we expect them to any time soon.

The deal, if it happens, would create a publisher with combined annual revenues of roughly US$2.7 billion and combined earnings before interest, taxes, depreciation and amortization (EBITDA) of US$1.5 billion, making it the third-largest U.S. publisher. The Kelsey Group believes the deal, again if it happens, would create some cost synergies. It would also give the combined company a larger sales force and geographic footprint, which would offer some advantages, particularly as online directory and local search advertising sales begin to take form.

Copyright � 2005 The Kelsey Group. All Rights Reserved.
This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under Federal law. The Kelsey Group disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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