It Wasn’t Just a Rumor, RHD Buys Dex

This just in, R.H. Donnelley has acquired Dex Media for equity of $4.2 billion and debt assumption of $5.3 billion, for a total value of $9.5 billion, a multiple of roughly 10 times Dex’s 2004 EBITDA. Current RHD CEO Dave Swanson will be CEO, RHD COO Peter McDonald will be COO of the expanded company, and Dex Media CEO George Burnett will be chairman of the board of directors. We will have more coverage in this week’s LMJ. We issued an advisory on Sept. 23 exploring the news that talks were under way, taking the safe course and giving it about a 50-50 chance of happening. Apparently the financial drivers of the deal were just too compelling. One clue for us was that RHD brass were scarce at our DDC2005 event last week, despite their initial plans to attend.

Together, RHD and Dex will be the No. 3 player with combined revenues of roughly $2.7 billion, passing BellSouth Advertising & Publishing. Yellow Book remains the No. 5 player, with the top 2 slots held by SBC Directory Operations and Verizon Information Services.

Here is the Dex news release: http://phx.corporate-ir.net/phoenix.zhtml?c=148542&p=irol-newsArticle&ID=763314&highlight=

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