Carlyle and Welsh snap up QwestDex

A consortium comprising US buyout firm The Carlyle Group and Welsh Carson Anderson & Stowe has won the race to acquire the telephone directories business of Qwest Communications.

Reports suggest that the consortium has agreed to pay just over $7bn for QwestDex, beating off competition from Thomas H. Lee Partners, Bain Capital and Providence Equity Partner, which had bid for only part of the phone book operation.

Reuters reports that Qwest will receive an initial $2.8bn for QwestDex, which distributes 45m directories across 14 US states, with the remainder to be paid at a later date. The initial proceeds of the transaction will be used to amend the terms of a $3.39bn credit agreement.

The $7.05bn price tag is slightly below original predictions of an $8bn-$10bn deal, although given the ongoing difficulties surrounding Qwest, including massive Q2 losses and ongoing concerns about the company’s accounting practices, the price was always likely to be below the original target.

The transaction is one of the biggest LBOs of all time and is some way ahead of the £2.1bn paid by Apax Partners and Hicks, Muse, Tate & Furst for Yell, the British Telecoms directories business last year.

Further details of the financing package for QwestDex are yet to be disclosed, although are expected later this week.