After months of on again, off again rumors the deal of the century, at least in the Yellow Pages industry, has finally come to pass. Dex Media has acquired its rival YP to become — wait for it — DexYP.
Terms were not disclosed, but the Wall Street Journal reported early today that Dex paid $600 million for YP.
The deal takes two of the largest remaining print and digital Yellow Pages organizations and creates one behemoth with a customer base  of roughly 700,000 small and midsize businesses, with a nationwide footprint. The new company will have combined revenues of more than $2 billion, about half of which is digital. The new company projects revenues will decline to $1.8 billion by 2021 while growing its EBITDA margin from 23.1% in 2017 to 28.8% in 2021. Greater efficiency from the merger, plus an emphasis on higher margin products are likely reasons for the projected margin increase.
Hibu US and to a lesser degree Vivial remain as the only Yellow Pages peer companies with any scale in the United States.
The merger combines two companies of similar size but with different strategic visions. Dex is clearly moving in the direction of provisioning the operating system for SMBs, offering tools and technologies to help SMBs acquire customers and then manage those customer relationships to increase yield, improve customer retention and so on.
YP had been much more focused on its brand and building an audience to monetize through ad sales. It also was very focused on building digital presence. YP CEO Jared Rowe had spoken at industry conferences emphasizing YP’s brand and audience and has even brought print back into the conversation, promising investments to extend the life of print. The company even revived its old “Real Yellow Pages” branding, though it’s unclear if that will survive the merger.
Dex on the other hand has emphasized its Thryv (formerly DexHub) business automation software offering, which allows SMBs to manage customer data, do text and email marketing, post social content, book appointments and more through a single platform. The merger gives DexYP and opportunity to offer Thryv to a much larger base of existing customers and an expanded footprint of potential new customers. In the merger announcement the companies identified its addressable market at 8 million small businesses.
The company will be led by Dex Media CEO Joe Walsh and will be headquartered in Dallas. Walsh has long held a vision for consolidation of the U.S. market into a single, massive Yellow Pages entity. This merger brings that vision much closer to fruition.
7 Responses
Who cares.
It’s not a merger it’s an acquisition
Hmm. Deal of the century? What about when RHD bought Dex in January 2006? That transaction had an enterprise value of $9.5 billion and combined annual revenue of $2.5 billion–$500 million more in top line than this one. https://www.carlyle.com/media-room/news-release-archive/rh-donnelley-completes-acquisition-dex-media-creates-nations-third
Yes . . . deal pricing reflects diminished value of publisher revenue.
I recall when AT&T/SBC paid $100 million for YellowPages.com and Joe Walsh paid around $100 million to add Trans Western Publications to the Yellow Book family. AT&T Publishing & Advertising was worth $6 Billion at one point and worth about $2.5 Billion when I left.
It’s interesting to see how badly they have done as an industry, especially since they have a leg up on new comers like Google. The Yellow Pages industry did not know what hit them when the internet overtook their print media, and they have done a less than great job in adapting to the digital world.
Digital leveled the playing field for a lot of people: the customers, the incumbents and the newcomers. The newcomers seem to have done the best so far.
The Dex Media/YP operation is transforming its business into a digital powerhouse! There business automation SaaS Thryv is already over 100 million dollar business per year! There reach with there owned and operated sites are impressive and with more roll up of the local search industry, I’m sure we will see more impressive things to come! With EBITA of over 500 million….this will be a transformation to watch!
Combining the reach of the largest local ad platform in the United States with Dex Medias Thriv software is a recipe for success! Businesses need an easier, more efficient way to generate, track, and retain customers. DexYP does exactly that! As long as DexMedia continues to brand the quality of visitors using the DexYP platform, then I see good things to come from DexYP in the future!