London Times Reports Yell to Make Play for TWP
A March 27 article in the Times of London online edition says Yell Group is planning to pursue an acquisition of TransWestern Publishing, which recently disclosed it had retained Goldman Sachs to €œexplore its strategic options.€
This report comes as no great surprise to us, since Yell has a well-stated ambition to achieve a true national footprint for its Yellow Book division. As it stands, Yellow Book, the largest competitive publisher in the U.S., is in the best position among U.S. operators to declare itself a national publisher. Buying TransWestern would further enlarge Yellow Book€™s footprint, as well as its base of revenue. Assuming the Times report is true, the burning question is how much is Yell willing to pay, particularly if multiple bidders drive up the price?
The general consensus has been that TransWestern could fetch upwards of US$1 billion. Yell€™s most likely competition will come from private equities, which still hunger for Yellow Pages deals that have generally performed well, and at times spectacularly, for investors.
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I would say that Yellow Book has a tremendous online opportunity, and the more they fill in their national footprint, the bigger the opportunity becomes. That said, they have much work to do in order to capitalize on that opportunity.
It will be interesting to see what yellow book does online. They don't have much of a presence or strategy right now.
Yell is doing good things with online YP and search while YellowBook doesn't seem to think that print is really declining. Transwestern hasn't made much of an investment either although they are making money at it (for now). If YellowBook does this deal, they need to make a serious effort in online. Will they do that or will they turn into a company with an incumbant's mentality?