Will Sensis Go on a Buying Spree?

An article in the Australian newspaper confirms that Sensis will need to pursue acquisitions in order to meet the five-year growth objectives set out by Telstra CEO Sol Trujillo back in 2005. Telstra is Australia’s leading telecom and is the parent of Sensis, the leading directory publisher. In 2005, Telstra vowed that Sensis would double its revenues to about A$3 billion by the 2010-11 financial year (Telstra’s year ends June 30).

Financial analysts have long been skeptical about Sensis’ ability to meet that goal without acquisitions. The newspaper article quotes Sensis CEO Bruce Akhurst as saying that M&A “will be required to reach our goals of more than $3 billion in revenues in FY2011.”

The article also quotes Akhurst as saying that Sensis has seen improvement in its Yellow Pages and classified business, and that it expects White Pages to grow at a double-digit pace in the 2008 financial year.

It’s unclear what Sensis will acquire. The company has been an active buyer in the past, with somewhat mixed results. Notably its 2004 acquisition of Trading Post has struggled under Sensis ownership. The publisher was an early bidder on New Zealand’s Yellow Pages operation but withdrew as the price rose. A private equity group later acquired that operation. We would expect Sensis to focus on online-oriented acquisitions in the region.