Verizon Communications will consider selling or spinning off its directories business, a deal that could be worth as much as $17 billion (€14.5 billion), according to the Wall Street Journal.
No potential buyers were named in the report. The telephone directory space has been one of great interest and profitability for large private equity firms in recent years.
The division, Verizon Information Services, had revenues of $3.6 billion in 2004, and earnings of $1.7 billion. The business, based in Texas, has 7,300 employees. Verizon has hired Bear, Stearns & Co. and JPMorgan Securities to help it explore alternatives for the division.
New York-based Verizon is in the process of finalising its merger with MCI. According to a statement from Verizon CEO Ivan Seidenberg, the potential directories sale would “unlock value” and help the conglomerate focus on high-growth wireless, broadband and enterprise customers.
In March, Boston-based Bain Capital sold its Canadian directories business to Canada’s Yellow Pages Group. The business had been purchased just four months earlier from Verizon Canada.
Directory businesses are highly attractive to private equity firms because of their consistent cash flow and historic resistance to business cycles. These characteristics have also allowed for some recent, highly profitable exits through public listings in the UK and Canada. Almost every major private equity firm has at one point owned a directory business, also called “yellow pages.”