Sale Points to Changing Industry Structure
many months of analysis, due diligence and speculation, Qwest Communications
announced the sale of its QwestDex Yellow Pages subsidiary to a private
equity investment team formed by the Carlyle Group and Welsh, Carson,
Anderson & Stowe. The value of the transaction is estimated at US$7.05
billion, or about seven times earnings before interest, taxes, depreciation
and amortization (EBITDA). The directory unit generated US$1.6 billion
in revenue last year and an estimated US$1.0 billion in EBITDA.
The first stage of
the deal, involving the sale of QwestDex operations in Colorado, Iowa,
Minnesota, Nebraska, New Mexico, North Dakota and South Dakota, is for
US$2.75 billion and is expected to close in the fourth quarter of 2002.
The second phase, which includes Arizona, Idaho, Montana, Oregon, Utah,
Washington and Wyoming, is for US$4.3 billion and is expected to close
in 2003. Should the transaction close at this price, it would represent
the lowest valuation for any major Yellow Pages property in recent years.