Telstra chief executive officer (CEO), David Thodey, claims the timing of the sale of its majority stake in Sensis will allow the telecommunications provider to “really focus on what we think is a more strategic part of the business” while allowing Platinum Equity to operate the directories business separately.
Thodey's comments came during an analyst, investor and media conference following Telstra's announcment on January 13, that it will sell 70 per cent of Sensis to US-based private equity firm, Platinum Equity for $454 million.
The telco also said that as part of its Carrier License, Sensis would continue product and distributing the White Pages Directory, with the telco to continue to provide directory assistance services under the same obligations.
Thodey since confirmed Telstra expects the transaction to be completed before the end of the first quarter of the 2014 calendar year.
In operating Sensis as a standalone entity, Platinum Equity will provide it with the focus is requires to assist it with its transition from traditional print to a digital directories company, according to Telstra.
While Thodey was adamant “this partnership is going to be of benefit to Sensis”, he said “it’s really going to be business as usual as we start” and that it is “premature to say too much about the long-term aspects of this transaction” until the acquisition is completed.
“The reality is that Sensis is still going through that transition and its earnings before interest, taxes, depreciation and amortisation [EBITDA] is declining and has been declining around 20 per cent per annum.”
Keeping a claim
Telstra’s retention of a 30 per cent stake in Sensis is valued at $649m in combination with the voice services business.
Thodey said the key benefit on the decision to retain a minority share is around its offerings to small and medium businesses (SMBs) and the way in which it views the digitisation of a selection of offerings to those customers.
It also allows the telco to maintain its exposure to the digital advertising world.