Colorado firm to pay $435M to HawTel for directories
Hawaiian Telcom will sell its telephone-directory business to a Colorado company
Hawaiian Telcom will sell its telephone-directory business to Colorado-based Local Insight Media for $435 million.
Hawaiian Telcom CEO Michael Ruley said yesterday the sale, which requires state Public Utilities Commission approval, will help pay off debts and allow investment in new technologies.
Hawaiian Telcom has agreed to sell its directory-publishing business to a Colorado company for $435 million.
If the state Public Utilities Commission signs off on the deal, Hawaiian Telcom plans to use the proceeds to pay down existing debt and to make continued investments in its infrastructure.
The directory would continue to be published under its current brand as the official telephone book of Hawaiian Telcom. The buyer, Local Insight Media, intends to retain the current contract publishing company, LM Berry Co., which has 62 employees.
"We knew that these directories were valued pretty highly," said Hawaiian Telcom CEO Michael Ruley. "We wanted to see what the process would yield, and we were pleasantly surprised by the outcome. We're happy to sell to a very qualified buyer and we're very happy with the price they paid."
Lehman Brothers Inc. acted as exclusive financial adviser to Hawaiian Telcom in the deal.
Hawaiian Telcom's move is consistent with a growing number of phone companies that are selling their directories to focus on their core businesses.
It also comes on the heels of Aiea-based Paradise Media Group's February decision to sell its Paradise Yellow Pages for an undisclosed sum to Yellow Book USA, a unit of the Reading, England, company Yell Group PLC.
The third player in Hawaii's directory market, Ad-Ventures Hawaii, is an independent publisher.
Ruley said the company believes the transaction positions Hawaiian Telcom well for future growth.
"This sale allows us to continue to provide quality service to our customers and also to focus on more rapid investments in our core businesses -- telecommunications services and products," Ruley said. "We aim to be the technology leader in our market."
Hawaiian Telcom in February brought in global consulting firm Accenture Ltd. to take over its troubled billing and other back-office systems from BearingPoint Inc.
It has also made moves toward providing television service over the company's high-speed Internet network, now slated for a 2008 launch.
The directories Hawaiian Telcom acquired from Verizon Hawaii in 2005 have evolved from a 2,200-plus combined SuperPages to separate smaller, company-branded yellow pages and white pages.
Based in Englewood, Colo., Local Insight Media is a provider of print yellow pages and Internet-based local search services, with four subsidiaries serving greater Cincinnati, Alaska and the Caribbean.
An application for the sale's approval will be submitted to the PUC within two weeks.
In 2007, Hawaiian Telcom will publish 10 directories on Oahu, Maui, Kauai and the Big Island at what it says is a total circulation of more than 1.8 million.