Apax, Cinven agree €2bn VNU buyout

VNU, the Dutch information and media company, has agreed to sell its World Directories business to private equity firms Apax Partners and Cinven for just over €2bn.

Apax Partners and Cinven have reached agreement with Dutch information provider VNU to acquire VNU World Directories, a directory publisher, for €2.075 billion ($2.5 billion).

A statement on behalf of the two firms said Apax Partners and Cinven would acquire equal stakes in the business from the Apax Europe V fund and the third Cinven fund respectively, which both raised €4.4 billion in total capital. A syndicate comprising JP Morgan, CSFB, Goldman Sachs and Bank of America are arranging and underwriting debt facilities for the transaction.

A spokesman for the financiers said the amount of equity and debt invested and the respective stakes being acquired was not being disclosed.

World Directories, which employs 2,200 staff, publishes Yellow Pages directories and telephone books in print, online and mobile formats. The firm produces 125 directories with a circulation of over 40 million copies under brand names such as Golden Pages, Gouden Gids and Pages d’Or in seven countries: Belgium, the Netherlands, Ireland, Portugal, Romania, Puerto Rico and South Africa.

In the year to 31 December 2003, World Directories generated €492 million of revenues and €228 million of EBITDA.

“World Directories is a very stable, high margin and cash generative business with significant growth opportunities both in print and online,” said Cinven partner Brian Linden. “We see substantial upside for the group through a tightly focused strategy of investment in the sales force, marketing and product development.”

Apax has enjoyed past success in the directories sector. In 2001, it invested alongside Hicks, Muse, Tate & Furst in the £2.1 billion buyout of Yell from British Telecom. Yell was floated in July 2003, and when Apax fully exited the business in January 2004 it was reported to have gained a money multiple of 2.5 times the original investment.

Apax had previously been part of a private equity consortium in 1999 that acquired Thomson Directories, the UK directory business that was subsequently sold to Italy’s Seat the following year.

Cinven’s previous deals in the publishing sector include: Aprovia and Medimedia, the business and healthcare publishing activities of Vivendi Universal, which were acquired for €493 million in June 2002; and the merger of Bertelsmann Springer, which was acquired from Bertelsmann for €1.05 billion in September 2003, with the former academic publishing arm of Wolters Kluwer.

Apax recently launched a new buyout fund with a target of €4.5 billion, while Cinven is expected to hit the fundraising trail sometime next year.