Business News

Yellow Media Inc. Announces the Divestiture of Trader Corporation

Monday 28. March 2011 - - Sale of automotive assets for $745 million - Focus on core business and YPG's digital transformation - Strengthening capital structure

Yellow Media Inc. (TSX:YLO) announces that it has reached a definitive agreement to sell Trader Corporation (“Trader”) to funds advised by Apax Partners for a purchase price consideration of $745M. Closing of the contemplated transaction is expected to occur in June 2011, subject to regulatory approvals and other customary conditions.
“This divestiture is attractive for our shareholders and will allow us to deploy capital in our core business, helping accelerate our digital transformation while further strengthening our capital structure,” said Marc P. Tellier, President and Chief Executive Officer of Yellow Media Inc. “As Canada’s number one Internet company, we want to focus our efforts on the acceleration of our digital transformation via our Yellow Pages 360 Solution.”
Trader was formed in June 2006 with the integration of Classified Media (Canada) Holdings Inc. (Trader Canada) and Trader Media Corporation (TMC). Trader publishes approximately 160 publications and 22 web sites covering four product verticals: automotive, real estate, general merchandise and employment.
Trader will continue to own and operate leading Canadian automotive and generalist online properties including AutoTrader.ca, Autos.ca, AutoHebdo.net, and Buysell.com, as well as 74 related publications. In addition, Trader will retain its interest of approximately 30% in Dealer.com, the leading US digital solutions provider to the automotive dealer segment.
The real estate, employment and LesPAC.com businesses are excluded from the proposed divestiture. These businesses will continue to be owned and managed by Yellow Media Inc.
The purchase price consideration of $745M, subject to working capital and other adjustments, will be payable in cash at closing. The transaction has fully committed financing, consisting of equity provided by Apax Partners and financing commitments provided by RBC Capital Markets. The proceeds from this divestiture will be largely used to reduce indebtedness and for general corporate purposes.
Concurrent with this announcement, Standard & Poor’s and DBRS confirmed their credit ratings for Yellow Media Inc.
TD Securities Inc. and Morgan Stanley acted as financial advisors to Yellow Media Inc.