TransWestern to Explore Strategic Options
TransWestern Publishing issued a brief press release today announcing that it has engaged Goldman Sachs to "explore strategic alternatives." Generally, this language translates into, "We are for sale."
One question of course is, who is the likely buyer? Yellow Book always comes to mind whenever the sale of any major independent comes up (or any independent for that matter). Another private equity transaction is always a possibility. Or what about another media player? Hearst bought White in order to broaden its customer and content base, not to mention its cash flow and revenue stream. Who’s to say another media player won’t show an interest in a company that has revenues of close to US$400 million and an EBITDA margins of around 30 percent?
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I'm not sure the Internet is directly forcing this consolidation. It might be argued that the days of making good money on relatively low infrastructure investment are drawing to a rapid close, which will force those unwilling or unable to make such investments to sell to those who are in such a position.
Do you think the internet is forcing all this consolidation? Or is it a "me too" function of the psychology of the marketplace?
It won't be a current YP publisher or a private equity firm. There is a reason their EBITDA is so high…no investment. This dog has been wet too long and it smells funky to anyone who gets too close. I think it will be a newspaper company or even a search company that wants their sales reps.