Telstra sells Sensis stake for $450m

TELSTRA has sold a majority stake in its directories business Sensis to US-based Platinum Equity

Sensis signage in Melbourne

TELSTRA will sell a 70 per cent stake in its directories business Sensis to a US based private equity firm for just over $450 million.

Under the sale, Telstra will retain a 30 per cent stake in Sensis, which includes the White and Yellow Pages, and will retain whole ownership of its voice services business.

The deal valued Sensis at $649 million, with US-based Platinum Equity paying $454 million for its 70 per cent stake.

The transaction price is equal to a multiple of 2.4 times Sensis' forecast 2014 financial year earnings, which Telstra says is consistent with valuations of recent international directories transactions.

Analysts had earlier put the value of the business at around $3 billion.

Telstra boss David Thodey said Telstra had spent the past two years building up Sensis' digital directory offerings and the partial sale to Platinum Equity would allow the business to grow further.

"Platinum Equity will operate Sensis as a separate entity, giving it the focus it needs to extend and enhance customer offerings and benefits in an agile digital world."

Telstra said the sale proceeds will be incremental to the company's free cashflow guidance of $4.6 billion to $5.1 billion, though it expects to book an accounting loss of $150 million in relation to Sensis.

Platinum Equity chief executive Tim Gores said the firm would be looking for new opportunities to develop the business.

"We will empower management's focus on the core directories business while evaluating and pursuing prospective new strategic initiatives," he said.