The US investor, Texas Pacific Group, has reached an agreement with Telenor on the sale of Telenor Media. Texas Pacific will pay NOK5.8 billion (euro722 million) in cash to acquire the Norwegian directories business. Schroder Salomon Smith Barney worked with the firm to finance the acquisition. The transaction is awaiting Norwegian regulatory approval and is expected to complete before the end of the year.
Texas Pacific bid with Kohlberg Kravis Roberts for Yell earlier this year but lost out to Apax and Hicks, Muse, Tate & Furst’s bid of GBP2.14 billion (euro3.48 billion). In the bidding for Telenor Media Texas Pacific faced competition from Eniro, a Swedish directories group. Telenor, which is listed on NASDAQ and the Norwegian stock exchange, also considered floating its media division. Tormod Hermansen, CEO of Telenor, said: “We have maximised cash proceeds from Telenor Media by selling the entire company in a clear and simple cash deal, rather than realising value through a separate stock exchange listing.”
The sale, which fulfils Telenor’s aim to realise value from non-core business areas, will result in a book gain of NOK5 billion (euro622 million). It has been reported that this will be used to strengthen the company’s balance sheet, paying down debt accumulated through 3G purchases – Telenor holds one of Norway’s four 3G licenses. Moving forward, Telenor will focus on its core businesses particularly mobile telephony, the Internet, TV networks and satellite communications. Last year the company generated turnover of NOK37.6 billion (euro4.6 billion).
Telenor Media, a 100 per cent subsidiary of Telenor, offers directory information and advertising services in Norway and 11 other European countries. The businesses it operates include printed directories and Internet portals for white and yellow pages. Last year it reported revenues of NOK1.655 billion (euro204 million) and EBITDA of NOK359 million (euro44 million). Telenor Media employs 2,400 people, 1,500 of which are employed outside Norway. As an independent company it will pursue strategic objectives in Norway and internationally to create a leading European directories business.
A spokesperson for Texas Pacific said: “We will take the opportunity to grow Telenor Media organically and through acquisitions, although it’s a strong business as it stands.” The investor plans to consolidate the business by strengthening its international operations, enhancing its current products and launching new ones.
Telenor was advised by Deutshe Bank and Credit Suisse First Boston. Schroder Salomon Smith Barney advised the acquirer.