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Verizon directory unit up for sale

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Verizon is putting its phone directory business up for sale in order to focus on phone and Internet service, the company said Monday.

A sale of the publishing unit - called Verizon Information Services (VIS) - could bring $13 billion to $17 billion, according to analysts.

Verizon said its board of directors authorized the company "to explore divesting VIS through a spinoff, sale or other strategic transaction."

The decision comes as Verizon continues its multibillion-dollar investment to build a fiber network capable of delivering phone, Internet and television service.

Verizon, which said it will close its $7.5 billion purchase of long-distance provider MCI "shortly," said the time is right to shed the directory business. The company had previously sold its phone book operations in Hawaii and Canada.

"We believe that separating VIS from Verizon would enable both businesses to pursue their strategic growth opportunities more effectively," Verizon Chairman and CEO Ivan Seidenberg said in a statement.

VIS controls, an online phone directory. The division publishes about 1,750 directories in 44 states including New Jersey and Washington, D.C. This includes almost 1,200 Verizon directories with a circulation of approximately 121 million copies. VIS had combined operating revenues of $3.6 billion in 2004. The unit is based in Texas and has 7,300 employees.

A company spokeswoman said the division has 356 employees in New Jersey.

The company has been cutting costs at its local yellow pages divisions and senior sales representatives, in particular, are worried. One union member said news of a possible sale sent jitters through the ranks here.

"As far as the mood, it is one of great distrust," said Tom Costello, business manager for Communications Workers of America Local 1025 which represent 150 New Jersey VIS workers.

The company said it anticipates it could complete a sale or other alternative transaction next year.

Verizon has hired Bear, Stearns & Co. Inc. and JP Morgan Securities Inc. to advise it on the deal.

While some analysts speculated that search behemoth Google might be interested - the big search companies are looking for ways to get a foothold in the local search business - others believed buyout firms might be more likely suitors.

Such companies are attracted to the steady cash flow that phone directories produce.

Last year, Verizon cut a deal with Carlyle Group, selling the buyout company its local phone-book operations in Hawaii for $1.65 billion.

Along with others Carlyle Group bought Qwest Communications' directories in 2004 for $7.05 billion.

Also last year, Verizon sold SuperPages Canada to buyout firm Bain Capital for $1.54 billion.

Investors were lukewarm about the possible sale, sending shares of Verizon down 16 cents to close at $31.71.


(C) 2005 The Record, Bergen County, NJ. via ProQuest Information and Learning Company; All Rights Reserved

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