Issue: The Big
Get Bigger; TWP Now No. 2 Independent Publisher
Publishing, backed by its chief investor Thomas H. Lee Partners, reached
terms with the board of WorldPages.com to acquire the print-online Yellow
Pages hybrid for $3 a share. That amounts to $215 million in cash and
assumption of debt (the cash portion is estimated at $141 million). The
price represents a multiple of 1.8 times WorldPages revenues, 22 times
earnings before interest, taxes, depreciation and amortization (EBITDA),
and 10.8 times EBITDA on the company's print directories, which provide
most of its revenue.
The deal will make
San Diego-based TransWestern a $280 million publisher, placing it ahead
of McLeodUSA as the second-largest independent Yellow Pages publisher
in the U.S. With the acquisition, TransWestern will publish 312 directories
in 22 states.
Richard O'Neal, a
longtime fixture in the Yellow Pages industry, has stepped down as WorldPages
CEO. He will remain chairman until the deal closes, which is expected
to be within 90 days. George Anderson, a WorldPages board member and former
NYNEX sales executive, has stepped in as interim CEO.
In 2000, WorldPages
had $117 million in total revenue, $106.5 million of which came from its
printed directories. WorldPages distributes seven million directories
in 42 markets, including Austin, Amarillo, Tucson, Tulsa, Ft. Worth, Portland
(OR), Tacoma and Seattle.