VS&A Quickly Closes Chapter on YellowBook –

VS&A Communications Partners, the private investment arm of media investment bank Veronis, Suhler & Associates, late last month sold Yellow Book USA, a U.S. business-telephone directory publisher, to British Telecommunications plc, for $665 million.

Jeffrey Stevenson, VS&A president and general partner, said his group purchased the Rockville Centre, N.Y.-based company in 1997 for approximately $140 million and that the exit generated an internal rate of return of roughly 120%.

According to Stevenson, British Telecommunications approached VS&A with an offer for the company, even though the firm was not in active discussion with any other potential buyers. Although VS&A had held Yellow Book for only two years, Stevenson said the company had such growth in those two years that it did not require VS&A’s more standard four- to five-year holding period.

A Bridge to U.S. Expansion

Stevenson said British Telecommunications will use Yellow Book as a platform for their expansion into the U.S.

When New York-based VS&A acquired the company two years ago (BUYOUTS p. 12, Oct. 27, 1997), it was called Multi-Local Media Information Group/The Yellow Book; following the deal, Yellow Book USA, L.P.-a partnership that owned the assets of the company-was established.

Almost two months later, Yellow Book acquired R.H. Donnelley Corp.’s eastern publishing operations, thereby tripling its size, Stevenson said. The company continued its growth with three more acquisitions in the last two years and also has launched several new directories.

According to Stevenson, Yellow Book will face direct competition with Bell Atlantic Corp. when current plans are realized at Yellow Book to publish a Manhattan directory.

With circulation of approximately 19 million, nearly 300 directories and more than 1,400 employees in 32 offices, Yellow Book is the largest independent publisher of telephone directories in the U.S.-meaning, it is the largest of those not owned by one of the Regional Bell Operating Companies. Stevenson declined to provide revenue information for the company.

VS&A currently is making acquisitions through its third fund, VS&A Communications Partners III, L.P., which closed on $1 billion earlier this year (BUYOUTS Feb. 22, p. 14).