Telstra’s deal to sell off all but 30 per cent of Sensis to Platinum Equity values the total directories business at just $649 million.
The telco will receive $454 million cash from the deal, which had been widely expected to be worth more than $1 billion.
Compare the sale price to revenue from Sensis of $571 million in 2012-13. The traditional print directories revenue fell almost 20 per cent but the online side grew by more than 11 per cent.
However, not all of Sensis is being sold.
Telstra CEO David Thodey said the new partnership would maximise the value of the Sensis asset for Telstra shareholders.
“We have spent the last two years enhancing our print directories business with a rich set of digital directory offerings,” he says.
“Platinum Equity will operate Sensis as a separate entity, giving it the focus it needs to extend and enhance customer offerings and benefits in an agile digital world.”
Thodey says the transaction price is equal to a multiple of 2.4 times Sensis’ 2014 financial year earnings forecast after adjusting for the voice directories business which is being retained by Telstra.
The sale proceeds of $454 million are additional to Telstra’s 2014 forecast free cash flow of $4.6 billion to $5.1 billion.
“The fact that we have retained a 30 per cent stake in Sensis shows our belief it will continue to lead the market and deliver value to Telstra shareholders,” says Thodey.