Bain Capital has agreed to buy the Canadian directory operations of Verizon Communications for $1.54 billion (€1.27 billion).
The purchase of SuperPages Canada will be the second major yellow pages private equity deal in Canada in as many years. In late 2002, Kohlberg Kravis Roberts and the private equity arm of the Ontario Teacher’s Merchant Bank acquired 90 percent of Yellow Pages Group for C$3 billion (US$2.3 billion) from Bell Canada.
The SuperPages deal also mark’s Bain Capital’s second major directories play. In 1997, the firm acquired a stake in Seat Pagine Gialle, an Italian yellow pages business, in a €2 billion deal that included Banca Commerciale Italiani, Investitori Associati, BC Partners and CVC Partners. Bain Capital sold its stake for a reported significant gain in 2000 to Telecom Italia. Last year the phone company sold Seat to a group including private equity firms BC Partners, CVC Capital Partners, Investitori Associati and Permira.
SuperPages is Canada’s second-largest directories publisher, according to a press release. Last year it had revenues of US$293 million.
Bain Capital managing directors Ian Loring and Andrew Balson led the deal for the firm. “This will provide us with an opportunity to leverage the experience and success we have had with Seat,” Balson said in a statement.
Bain has long been a major investor in Canada. In 2000, it joined a private equity consortium to acquire Shoppers Drug Mart for C$2.55 billion (US$2 billion). The group also included KKR, Ontario Teachers' Merchant Bank, CIBC Capital Partners, Charlesbank Capital Partners, and DLJ Merchant Banking Partners.
Last year, Bain Capital teamed with Caisse de depot et placement du Quebec to acquire the recreational products business of jet maker Bombardier for C$1.2 billion (US$870 million).
KKR’s success with Yellow Pages has been impressive. After listing the company as a dividend-paying income trust on the Toronto Stock Exchange, KKR sold its shares and realised roughly C$1.6 billion (US$1.2 billion) on an initial C$545 million (US$423 million) investment in 2002.