Not that it wasn’t already dominant, but Canada’s Yellow Pages Group (YPG) has bought its most successful/threatening remaining directory publishing rival, Canpages, in a $225 million transaction that includes US assets.
According to the press release out this morning:
Yellow Media Inc. (“YPG”) announced today that it has reached a definitive agreement to acquire Canadian Phone Directories Holdings Inc. (“Canpages”) from an investor group led by private equity firm HM Capital Partners for a purchase price consideration of approximately $225M. Canpages is a local search and directories publisher in Canada . . .
Headquartered in Vancouver, Canpages publishes 84 directories for a total circulation of approximately 8 million copies. The company’s website, Canpages.ca, attracts more than 3.5 million unique visitors each month. Canpages generates annualized revenues of $110M with an online contribution of approximately 23%. The Company employs about 700 people in Canada of which more than 450 are sales consultants . . .
In addition to the Canpages acquisition, YPG announced the contribution of its U.S. directory operations, YPG Directories, LLC, publisher of Your Community Phone Book (“YCB”), to Ziplocal, LP. YCB is the publisher of independent directories in selected Mid-Atlantic and Southeast American markets and was acquired from Volt Information Sciences, Inc. in September 2008. Ziplocal is a leader in providing an innovative source of information for the businesses and communities it serves. The company operates ziplocal.com, and once the two entities merge, Ziplocal will reach over 300 markets across the United States.
There are essentially two transactions: the acquisition of Canpages and the transfer of YPG US operations to Ziplocal, an online local search provider that had previously been acquired by Canpages. Previously Canpages announced a partnership with Utah-based Phone
Company (PDC). The latter was contributing its US online operations to Ziplocal. I would imagine that will still be in place, but may set the stage for another YPG acquisition.
One person described this transaction to me in email in this way: “This would be the equivalent of pulling AT&T, SuperMedia and DexOne together” in the US.
As the quote implies, YPG will be the dominant local media company in Canada. It will compete against a few smaller players in the directory industry and independent channels such as ReachLocal for local advertisers. There are also some newspaper publishers that may decide to make a bigger push into “local search.”
On the consumer side, it will compete with Yelp, Citysearch, Google and some newspaper owned city sites like Torstar’s Toronto.com. Foursquare is also in Canada and has a deal with daily newspaper Metro.
YPG is the supplier of local data to Google Maps in Canada.
The US local market is much more competitive than in Canada and Ziplocal is a minor player. But he US represents a growth opportunity for YPG.
This is just the latest in a series of transactions for YPG, which include the acquisition of sites like Restaurantica and several shopping-related destinations such as RedFlagDeals. The company now has a broad portfolio of local digital assets beyond its flagship yellow pages directory site.