Deal ‘imminent’ for KPN Telemedia

3i is close to completing the E500m acquisition of KPN’s Telemedia division in the latest instance of a directories business going to a private equity buyer.

UK-based private equity firm 3i has confirmed that it is set to acquire Telemedia, the directory services business of Dutch telecom operator KPN. 3i is expected to pay between E470m and E510m for the business, which was put up for sale earlier this year as part of a series of asset disposals by the Dutch group.

Speaking at the firm’s results announcement this morning, 3i chief executive Brian Larcombe said that there was likely to be a further announcement from the firm ‘by the end of this week.’

Earlier this month KPN confirmed that it had selected 3i ahead of a number of fnancial buyers, thought to include Texas Pacific Group and Eurazeo, the private equity unit of Lazard. The telecoms group is selling the business as part of efforts to reduce its debt pile. The company has reduced its debt to E15bn from a high of E23bn.

The acquisition will mark the third case of a major directories business being sold to a financial buyer. Last year saw British Telecom sell its Yellow Pages business to a consortium of Apax Partners and Hicks Muse for just over £2bn. More recently, the largest deal in 2002, and the second largest private equity transaction of all time saw Carlyle Group and Welsh Carson Anderson & Stowe pay $7bn for the directories business of Canadian telecoms group Qwest.

However, private equity firms have not had it all their own way. In September, Sprint sold its $2.3bn directories business to R.H. Donnelley Corp, which beat off competition from Clayton, Dubilier & Rice, KKR and Texas Pacific.