Telstra directories sale positions Sensis for digital

Platinum Equity to acquire 70 per cent stake in Sensis for $454 million

Telstra has said its sale of Sensis to a US private equity firm is critical to transforming the White and Yellow Pages company into a "fully digital" business.

Telstra announced this morning that a US private equity firm, Platinum Equity, had agreed to pay $454 million for a 70 per cent stake in Sensis. Telstra will retain a 30 per cent stake in the directories business.

“Directories businesses right around the world have been experiencing massive change, and that has meant we’ve really had to readapt the business, and in fact Telstra’s probably one of the last telcos to own a directories business,” Telstra CEO David Thodey said on a call this morning with media and analysts.

“We think that to drive the further momentum to become a fully digital business, it’s an appropriate time to introduce a partner like Platinum Equity.”

Digital last year represented about 30 per cent of total revenue at Sensis, increasing at a rate of 11 per cent per annum, said Telstra CFO Andy Penn. At the same time, print revenues are declining at a rate of about 20 per cent per year, he said.

Even so, Thodey said there are no immediate plans to discontinue the print directories.

“We still think that there’s a place for a print version, especially in regional areas where there’s still an enormous use there, but there will be a tendency to use less and less print.”

“Knowing the way these changes take place, the tail is probably a lot longer than all of us think at the moment.”

Thodey said that the new Sensis entity would continue to print the Yellow Pages only in regions where it thinks are necessary.

“We find that the value of the Yellow Pages in some very dense metro areas is far less than in the rural, regional areas, so it will be a transition over a period of time.”

Sensis will continue to produce and distribute the White Pages Directory, and Telstra will continue to provide directory assistance (1223) services, as required under conditions of Telstra’s carrier licence, Telstra said.

Thodey said Telstra did not object to its regulatory obligation to produce the White Pages. “We need to be considerate to those who are not feeling as well educated in digital access to this technology,” he said.

After the deal is completed, which Telstra expects to be in the second half of fiscal-year 2014, Platinum Equity will operate Sensis as a separate entity.

The sale is still subject to customary conditions including approval from the Foreign Investment Review Board. Getting the FIRB’s approval should be “reasonably straightforward,” said Penn.

Platinum Equity has proven itself adept at carving out businesses from major companies, including CBS, Emerson and Deutsche Post DHL in 2013.

Follow Adam Bender on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

Comments

Comments are now closed.

Supporting Association

App Discovery is a huge problem. Here is a 101 Guide to help solve it! https://www.linkedin.com/today/post/article/20140712034258-264557...

Robert Haastrup-Timmi

Mobile marketing strategy: To app or not to app?

Read more

Thanks Chris for your feedback - I suspect that your view is one of business services, not just marketing, as was our original propositio...

Nadia Cameron

Mobile marketing strategy: To app or not to app?

Read more

This is an interesting article, but in my mind there's actually 3 kinds of apps not two: 1. Marketing, Campaign or Activation Resul...

Chris Inch

Mobile marketing strategy: To app or not to app?

Read more

For both apps, drivers and non-drivers, we measure both registration and usage. For online or mobile leads, our call centre checks the so...

Jörg Dietzel

Why Audi of Korea is spending a quarter of its marketing budget on mobile

Read more

Great article!

Senor Belvitos

BelVita Australian brand chief: Marketers need an entrepreneurial mindset

Read more

Sign in