Sprint has agreed to sell its directory publishing business, Sprint Publishing & Advertising, to R.H. Donnelley for $2.23 billion in cash. The transaction is expected to close in the first quarter of 2003.
R.H. Donnelley is a provider of yellow pages advertising and other services tailored to meet the marketing needs of the nation’s local businesses and currently is a partner with Sprint as a sales agent in certain Sprint Publishing markets.
Sprint is very pleased with our agreement with R.H. Donnelley. Donnelley has a heritage of expertise in the directories business and is a proven leader in the yellow pages industry, said William T. Esrey, chairman and chief executive officer of Sprint. The terms of the agreement represent a strong and mutually beneficial relationship for Sprint and R.H. Donnelley, and we’re eager to assist Donnelley in the transition process.
The transaction is expected to close in the first quarter of 2003 and is subject to customary regulatory approvals and closing conditions. The sale will yield after-tax cash proceeds in excess of $2 billion, which will improve Sprint’s financial flexibility and strengthen its liquidity position and balance sheet.
The sale of Sprint Publishing, the US’ sixth largest directory publisher, includes over 260 white and yellow page directories. The Sprint Yellow Pages has an annual circulation of more than 18 million in and around the communities in 18 states where Sprint serves as the local telecommunications service provider. Annual revenues, mainly from the sale of yellow pages advertising, are approximately $560 million.
Sprint will maintain a long-term, strategic working relationship with R.H. Donnelley under which R.H. Donnelley will be designated as the exclusive directory publisher for Sprint in the markets where Sprint currently provides local telecommunications service. R.H. Donnelley will continue to publish the Sprint Yellow Pages and will satisfy all of Sprint’s white pages publishing obligations.
Having been Sprint’s partner for many years, we know this business well and have long recognized Sprint Publishing to be a leader in the industry, said David C. Swanson, R.H. Donnelley’s president and chief executive officer. This transaction builds on both of our organizations’ core competencies to create a stronger platform for leadership in the yellow pages industry. As a fully-integrated yellow pages publishing company with a broad portfolio distinguished by customer and market diversity, we will have significantly enhanced scale, margin potential and growth prospects. This is an excellent opportunity for the shareholders, employees and customers of both organizations.
R.H. Donnelley will continue operating the business from Sprint Publishing’s current headquarters in Overland Park, Kan.