VCs follow Yellow Brick Road

3i and Veronis Suhler Stevenson have announced the consolidation of their three telephone businesses to create a pan-European directories group.

3i, the UK-based venture capital and buyout firm and VS&A Communications Partners III LP, the private equity fund of media merchant bank Veronis Suhler Stevenson (VSS) have consolidated their three European telephone directories businesses.

The new group, Yellow Brick Road is the first major pan-European directories consolidation and will comprise Fonecta, Telefoongids and Mediatel, leading directories companies in their respective markets of Finland, the Netherlands and Central Europe (Austria, Czech republic and Slovakia).

3i and VSS initially invested a total of €280 million ($340 million) in the three businesses and it is understood that the new group will generate earnings in the current year of approximately €160 million.

Gary List, former chief executive of Thomson Directories, will be appointed chairman of Yellow Brick Road, while the existing management teams will retain operational control of their respective businesses.

In a statement, Jonathan Russell, executive director of 3i’s buyout business said: “3i’s network played an integral role in the creation of Yellow Brick Road. We have freed up businesses owned by larger groups and created a business with some scale.”

Recent media publishing deals for 3i have included the purchase of the Trinity Mirror Group earlier this year and in 1999, 3i was part of the group  that acquired TDL Infomedia, publisher of Thomson Local directories in the UK.

In December 2000, the group sold this company to Italian media conglomerate Seat Pagine Gialle for an equity value of £308m and the assumption of approximately £150m of debt.