Fusion Corporate Partners

NEWS

Slight Decline Year-on-Year to $22.7 Billion, Still A Bright Spot in Media Industry

The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) today released the IAB Internet Advertising Revenue Report for the full year 2009. Though U.S. Internet advertising revenues, at $22.7 billion for the year, showed a 3.4% decline from 2008, there are signs of an emergent recovery in the industry. The fourth quarter of 2009 hit a record quarterly high of $6.3 billion, a 2.6% increase year-over-year and a 14% increase over the third quarter of 2009.

Highlights of the report include:

• Search and display-related advertising continue to represent the largest percentages of overall interactive advertising spend. Search revenues, comprising 47% of the total, amounted to nearly $10.7 billion for 2009, up slightly from 2008.
• Display-related advertising—which includes display ads, rich media, digital video and sponsorship—totaled nearly $8 billion in 2009, showing an increase of 4% from 2008.
• One component of display-related advertising, digital video, continues to experience robust growth, with an almost 39% increase from 2008 to 2009.
• These latest revenue figures underscore the significant share shift taking place from traditional media to digital. Based on industry data from PwC from 2005 to 2009 in five key U.S. ad-supported media (television, radio, newspapers, consumers magazines and Internet), the Internet’s share of combined ad revenue grew from 8% to 17%.

Full Press Release

The Fusion Team have completed over 70 digital and media transactions for its private, corporate and private equity clients. For more information contact pkelly@fusioncorp.co.uk or visit our website
 
 
ACQUISITION 
FDN Database Reference:  F231109-369
 
Yellow Media Inc. (TSX: YLO.UN) (“YPG”) has reached a definitive agreement to acquire Canadian Phone Directories Holdings Inc. (“Canpages”) from an investor group led by private equity firm HM Capital Partners for a purchase price consideration of approximately $225M. Canpages is a local search and directories publisher in Canada.
 
The purchase price consideration of $225M is subject to working capital and other adjustments. It will be comprised of $75M payable in cash at closing to settle third party debt obligations and the issuance of $150M of Mandatory Exchangeable Promissory Notes (“Exchangeable Notes”) of Yellow Media Inc. The Exchangeable Notes will rank subordinate to the senior debt of Yellow Media Inc. and bear interest at a fixed initial rate of 5%, payable quarterly in cash, subject to step up provisions over time.
 
Starting in the first quarter of 2011, the Exchangeable Notes will be exchangeable into common shares of Yellow Media Inc., the surviving entity following the conversion to a traditional corporate structure. Each quarter, HM Capital Partners will have the right to exchange $37.5M of the Exchangeable Notes, representing 25% of the principal amount. At any time following closing and until December 31, 2014, YPG may redeem all or a portion of the Exchangeable Notes for cash together with accrued and unpaid interest. The Exchangeable Notes will have a final maturity of December 31, 2014. Any remaining Exchangeable Notes will be automatically exchanged into common shares of Yellow Media Inc. on December 31, 2014.

Acquirer:  Yellow Pages Group
ACQ Web:  http://www.ypg.com
Other Web Links: YellowPages.ca, Canada411.ca, Auto Trader, Home Trader and LesPAC.com
Location:  Canada, Montreal, Quebec
Region:  North America
Description:  Yellow Pages Group publishes more than 340 Yellow Pages and residential print directories in Canada. YPG also owns and operates Canada’s most visited online directories – YellowPages.ca and Canada411.ca, along with CanadaPlus.ca, a network of seven local city sites. Yellow Pages Group is indirectly held by Yellow Pages Income Fund (TSX:YLO.UN).
Category:  Directory, Search
Contact 1:  Marc P. Tellier, President and Chief Executive Officer
Contact 2:   Christian M. Paupe, Executive Vice President – Corporate Services and Chief Financial Officer
Contact 3:  Stephane Marceau, Chief Marketing Officer  
 
Vendor:  Investor group led by private equity firm HM Capital Partners
Business Sold: Canadian Phone Directories Holdings Inc. (“Canpages”)
Website:  http://corporate.canpages.ca
Location:  Canada, Vancouver
Region:  North America
Descriptions:  

• Canpages – Canpages publishes 84 directories for a total circulation of approximately 8 million copies. The company’s website, Canpages.ca, attracts more than 3.5 million unique visitors each month. Canpages generates annualized revenues of $110M with an online contribution of approximately 23%. The Company employs about 700 people.
• HM Capital Partners– Based in Dallas, HM Capital Partners LLC has completed over 100 transactions in the media space, the Firm has owned approximately 500 radio stations, 30 television stations, 600 directories and cable television systems serving more than 2.5 million subscribers.
  Category: Directory, Search

Contact 1:  Peter Brodsky, a Partner at HM Capital Partners
Contact 2:  Oliver Vincent, Chief Executive Officer, Canpages

Links: 

• Press Release
• Canpages Factsheet
• Yellow Pages Income Fund Fact Sheet
   

Advisers: Scotia Capital and TD Securities acted as financial advisors to YPG for the proposed transaction. Signal Hill acted as advisor to Canpages.

Related Fusion DigiNet articles

• Yellow Pages Group purchases 411.ca Brand and acquires equity interest in 411 Local Search Corp February 25, 2010
• Yellow Pages Group acquires Clear Sky Media February 25, 2010
• Yellow Pages Group has acquired Restaurantica January 25, 2010