Alex Reid

Now this is interesting. Seems Yellow Pages has bought the publishing group that prints Auto Trader and other classifieds.

I’m surprised the Yellow Book guys are still floatable, considering the rise of the Internet. Maybe I’m from too far in the future, but telephone listings are dead.

Nice roll, YLO.UN (aside from the income trust sham you got going on).

MONTREAL (CP) – Yellow Pages Group (TSX:YLO.UN) is paying $760 million for Classified Media (Canada) Holdings Inc., a deal that it expects will extend its online retail reach to about 45 per cent of all Canadian web users.

Classified Media – whose 137 publications and nine websites include Auto Trader, Auto Hebdo, The Bargain Finder and Home Renters’ Guide – is also known as Trader Canada and accounts for about 36 per cent of annual revenues at Trader Classified Media NV of the Netherlands (OTC:TRDFF).

The deal announced Monday completes a national sweep by Yellow Pages.

In December, the group agreed to buy Trader Media Corp., Ontario’s largest publisher of classified advertising and websites, for $436 million in cash and stock.

“This transaction is a great opportunity for us to create a second national platform, this time in vertical media,” Yellow Pages CEO Marc Tellier said in a conference call Monday.

“The national platform shall allow us to build upon our publication and online properties, as well as driving operational synergies from the combined business.”

The deal will immediately add to distributable cash, he added.

“We expect to build an even more comprehensive database of advertiser content, which we can then digitize to provide keyword search functionality.”

UBS Investment Research said in a note that consolidation is continuing in the industry. “We suspect the North American directory industry is likely to see further consolidation in the next few years,” the UBS research note said. But UBS also points out there will be risk from increased competition from Internet search engines.

The Dominion Bond Rating Service said Yellow Pages has the ability to establish a leadership position in Canadian classified advertising publications, both print and online.

To help finance the latest deal, YPG said it has arranged a $350-million, five-year loan and a $250-million two-year loan. The combined business of Trader Canada and TMC generated revenues of about $297.5 million in 2005.

Yellow Pages Income Fund, a spinoff of Bell Canada parent BCE Inc. (TSX:BCE), owns a 96 per cent stake in Yellow Pages Group, Canada’s largest telephone directories publisher with more than 330 Yellow Pages directories and alphabetical pages.

The company also owns and manages online directories YellowPages.ca, Canada411.ca and CanadaPlus.ca, a network of seven local city sites.