Telstra today announced it had entered into an agreement to sell a 70 percent
stake in its directories business, Sensis to US based private equity firm,
Platinum Equity for A$454million.
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 per cent shareholding with Sensis now valued at A$649million.
Equity is a leading global private equity firm with a highly specialised focus
on business operations and 18 years of success in acquiring and operating
businesses which have been part of large corporate entities. Among the transactions Platinum Equity completed in 2013 were carve
outs from AP Moeller Maersk, CBS, CheckPoint Systems, Emerson and Deutsche Post
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.
have spent the last two years enhancing our print directories business with a
rich set of digital directory offerings. Sensis is now the leading digital
marketing services and directories business in Australia. To drive further
momentum, we believe it is the appropriate time to introduce Platinum Equity,
as a strategic partner,” said Mr Thodey.
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.”
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. This
is consistent with valuations for recent directories transactions globally.
The sale proceeds of A$454million are incremental to Telstra’s FY14 free
cashflow guidance of A$4.6billion to A$5.1billion. Telstra expects to book an
accounting loss on Sensis of approximately A$150million subject to completion timing
and adjustments. Approximately A$100million
is expected to be included in the December 2013 half year results with the
balance accounted for on completion, which is expected in the second half of
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.
Equity Chairman and CEO Tom Gores said he was pleased about the strong
relationship his firm has developed with Telstra.
have had great collaboration with Telstra and we believe the partnership will
provide Sensis a level of consistency that is good for the business as it
transitions to a standalone enterprise,” Mr. Gores said.
Gores said the Platinum Equity team looks forward to working with management to
drive the business forward.
“We will empower management’s focus on the core
directories business while evaluating and pursuing prospective new strategic
initiatives,” added Mr. Gores.
Thodey said Telstra had run a competitive sale process to select the right
partner to maximise the value of the business.
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
has been an important business for Telstra shareholders and the cash flow
generated by Sensis over time has contributed significantly to our ability to invest
in the growth of our core telecom businesses.”
will continue producing and distributing the White Pages Directory as required
under conditions of Telstra’s Carrier Licence. Telstra will also continue to
provide directory assistance (1223) services as required under conditions of
Telstra’s Carrier Licence. Voice services including the 1234 and 12456 services
are a part of Telstra’s core telecom offering and will continue to be operated
by Telstra as an ongoing supplier to Sensis.
completion, Telstra will consider the net proceeds from this transaction,
consistent with its capital management framework.
contact Telstra: Nicole McKechnie, +61 (0) 429 004617
Platinum Equity: Daniel Whelan, +1 310-282-9202
Ref number: 002/2014