Case Yell Group
Executive summary 2 PART 1: Valuation of the Yell Group 3 LBO Potential 3 Financial structure 3 Ownership structure 4 Potential cultural differences 4 Valuation 4 PART 2 : Readings 10 Bond prices and takeovers 10 Abnormal Bond Returns 10 Impact on bond returns of different legal standards in case of cross-border acquisitions 11 Sources of financing takeovers 11 References 14
Executive summary
The Yell group is consists of
BT Yellow Book Yellow Pages USA
and several smaller UK based companies.
In terms of being a god LBO candidate:
* The Yell Group has a well-established position in a growing market generating stable revenue streams that are reasonably recession proof. * The market position is good and leaves room for further expansion especially in the USA. In the UK new business initiatives have been set-up in order to probe new technologies for their applicability in the directory and related business. These initiatives could provide growth but growth(potential) has to be closely monitored. * Yell group is very capable of paying its debt. The ratio’s found in the Yell case seem high but we believe that the near future will show even higher leverage ratio’s * As a candidate for an LBO the Yell group provides good possibility for an exit as several market parties are interested and for the coming years an consolidation of the market is foreseen. * On the following pages an evaluation of the Yell Group is performed to assess the potential for a LBO. Below is a summary of this valuation. | | | | | | | | | | | | | | | Total Value of Yell Group | | | | | | | | | | | | BT YELLOW PAGES | | 1,515,588 | | | YELLOW BOOK USA | | 203,393 | | | Loans | | | | 162,484 | | | Other UK business | | 101,707 | | | Total Value | | | 1,983,172 | | | | | | | | | | Equity | | | | 533,172 | |
Executive summary
The Yell group is consists of
BT Yellow Book Yellow Pages USA
and several smaller UK based companies.
In terms of being a god LBO candidate:
* The Yell Group has a well-established position in a growing market generating stable revenue streams that are reasonably recession proof. * The market position is good and leaves room for further expansion especially in the USA. In the UK new business initiatives have been set-up in order to probe new technologies for their applicability in the directory and related business. These initiatives could provide growth but growth(potential) has to be closely monitored. * Yell group is very capable of paying its debt. The ratio’s found in the Yell case seem high but we believe that the near future will show even higher leverage ratio’s * As a candidate for an LBO the Yell group provides good possibility for an exit as several market parties are interested and for the coming years an consolidation of the market is foreseen. * On the following pages an evaluation of the Yell Group is performed to assess the potential for a LBO. Below is a summary of this valuation. | | | | | | | | | | | | | | | Total Value of Yell Group | | | | | | | | | | | | BT YELLOW PAGES | | 1,515,588 | | | YELLOW BOOK USA | | 203,393 | | | Loans | | | | 162,484 | | | Other UK business | | 101,707 | | | Total Value | | | 1,983,172 | | | | | | | | | | Equity | | | | 533,172 | |
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