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NEW YORK – AT&T Inc. announced Monday that it has agreed to sell a controlling stake in its Yellow Pages business to private equity firm Cerberus Capital for $ 950 million.
The company said it wanted to sell shrinking parts of its business so it could focus on growing segments, particularly its wireless business. Revenues for the Yellow Pages unit have declined 30 percent in two years.
Phone books were once a cash cow as businesses paid for advertisements as customers searched for local stores and services. Even with the sharp decline in revenues, AT & T’s Yellow Pages unit has been profitable before depreciation charges for the past three years.
AT&T, the country’s largest telephone company, is following in the footsteps of Verizon Communications Inc., the second-largest, in reducing its phone book business. Verizon ceded its directory business to shareholders in 2006, only to file for bankruptcy three years later.
Cerberus pays AT&T $ 750 million in cash and a $ 200 million note, plus a 47% stake in YP Holdings LLC that will oversee the company.
The sale involves 8,400 employees and is expected to close by mid-year.
Assets sold include 1,200 print editions of Yellow Pages in 22 states, as well as websites like Yellowpages.com and a mobile app. Together, they generated around 3% of AT & T’s overall revenue last year.
Source: Associated press