Declining Yellow directory business changes hands, again

In its heyday, the Yellow Pages tomes were a fixture of New Zealand households. Photo / NZME

Yellow, the telephone directory business at the centre of one of the biggest New Zealand busts of the Global Financial Crisis, has again been sold.

Companies Office filings show Nasdaq-listed Thryv took possession of all Yellow’s shares, previously largely owned by Australian fund Samuel Taylor, on April 1.

Thryv is a largely United States-based Yellow Pages conglomerate headquartered in Texas with a market capitalisation of $1 billion. The company recently expanded into Australia, and no purchase price for New Zealand’s Yellow was disclosed in Securities and Exchange Commission filings.

Yellow was famously spun off from Telecom in 2007 when a bidding war saw a private equity consortium largely backed by a Canadian pension fund come out on top by pledging to pay $2.24b.

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But the deal was struck just before the Global Financial Crisis (GFC), which squeezed credit markets and suppressed economic activity, and Yellow ran into heavy structural weather as internet search operators quickly displaced its core business of paper-based directories.

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The new shareholders were wiped out in 2011 when its bankers - owed $1.5b - assumed control.

Samuel Terry accumulated a majority stake by 2019, with an investor presentation last year noting they had acquired their stake “from motivated sellers at attractive prices”, and while they believed the business was operating in a “declining industry” it had “consistently generated cash, at a declining rate”.

The presentation said cash returns from the investment had, within three years, covered their purchase price.

The shareholding changeover also saw the dismissal of the previous board, which had since 2015 featured former New Zealand Rugby chairman Brent Impey.

The most recent financial statements filed for Yellow, for the year to June 2022, showed reasonably steady net profits after tax of $7 million generated from net assets of $18m. That year the company delivered $8m in dividends to its owners.

Annual revenues of $34m were evenly split between its long-standing - and slowly shrinking - printed directory business and its online equivalents.

Notes to the accounts said Yellow had weathered the Covid-19 pandemic and lockdowns by having “established a staff-led Love vs Fear communications series to drive connection, shared a number of mental health, physical and emotional wellbeing resources and welcomed staff back with wellness packs containing items from small businesses in Aotearoa.”