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