Verizon Says It Will Seek Buyers for Directory Unit
Verizon confirmed Mon. it’s seeking a buyer for its directories publishing unit -- Verizon Information Services (VIS). Based on some reports, the division could be worth 10 times EBITDA or $17 billion, the biggest such deal recorded. Verizon didn’t discuss potential value in a press release.
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Verizon said selling off VIS will let it focus more closely on its core wireless, broadband and enterprise business lines. VIS, which last year had revenue of $3.6 billion, is headquartered in Tex. and employs 7,300. VIS provides sales, publishing and other services to some 1,750 directories in 44 states and D.C. In 2004, Verizon sold local phone-book and other operations in Hawaii to Carlyle Group for $1.65 billion. Verizon also sold off SuperPages Canada to Bain Capital for $1.54 billion.
Verizon could use sale proceeds “to de-lever its [balance sheet] and could fund a share buyback,” UBS said. The money also could “strengthen its wireless position or accelerate its fiber build.” “The potential for a spin-off… could be viewed constructively for the company’s valuation,” Citigroup Global Markets said.
“With the MCI merger expected to close shortly, this is the right time for us to optimize our business mix and unlock value,” said CEO Ivan Seidenberg. “Given the attractive opportunities developing in the local search and advertising markets for VIS, we believe a divestiture would provide VIS with more flexibility to maneuver in the fast-changing environment of content providers.”
Verizon said it hired Bear, Stearns and JP Morgan as its financial advisors. It said an announcement is likely next year.