Comments on: Australia’s Sensis Acquired by U.S. PE Firm http://staging.blog.biakelsey.com/index.php/2014/01/13/australias-sensis-acquired-by-u-s-pe-firm/ LOCAL MEDIA WATCH. The Nexus of All Things Local Mon, 01 Jun 2015 22:23:47 +0000 hourly 1 https://wordpress.org/?v=4.2.39 By: Builder http://staging.blog.biakelsey.com/index.php/2014/01/13/australias-sensis-acquired-by-u-s-pe-firm/comment-page-1/#comment-2536400 Thu, 30 Jan 2014 06:14:46 +0000 http://blog.biakelsey.com/?p=28675#comment-2536400 Great summation of the situation Paul.

I agree with you on two fronts.

Firstly, Sensis will be very busy trying to get its act together for a public listing, whilst maintaining the decline of their print revenues. This will have the effect of making it difficult to maintain staff morale as they go through this further period of change (and downsizing).

Secondly, you are completely correct that this now leaves Australia as a massive untapped market. We feel that Service Central is well positioned to take up this void.

]]> By: Paul Plant http://staging.blog.biakelsey.com/index.php/2014/01/13/australias-sensis-acquired-by-u-s-pe-firm/comment-page-1/#comment-2525081 Mon, 13 Jan 2014 13:42:20 +0000 http://blog.biakelsey.com/?p=28675#comment-2525081 So the announcement has been made of the sale of the last remaining major Telco-owned Yellow Pages business. Today’s news from Australia that Telstra has sold 70% of Sensis to US-based Platinum Equity was not a major surprise, although many observers, myself included, feel that the Telco have not negotiated too hard, as the price appears to be a steal for Platinum. Only four years ago Sensis was flourishing with revenues of Aus$2.3bn, with accompanying margins around 62%, but their decline has been sharper than any peer by comparison, so today’s valuation (at just $650m) suggests that Telstra CEO David Thodey had just lost patience. Add to this the fact that Telstra is viewed by the Aussie public as a safe dividend stock, the lack of the $bn+ profit cheque, together with an uncertain future strategic model, has meant that the sell-off almost became an inevitability.

So what next? Australia remains a strong and relatively uncluttered market, where the digital opportunity is huge, but the new owners have to place their focus on a serious transformation journey for Sensis, starting with a more compelling product suite, particularly in digital, coupled with a fulfilment process and UX journey that is seamless and hassle-free.

There are clearly some echoes here of KKR and Solocal, and more recently Cerberus and AT&T. PE interest in the sector remains strong, and these two examples have proved that the former print-dominant YP companies can be transformed into profitable and sustainable digital services companies. It will not be easy for Platinum, especially when you consider that Telstra’s own Small Business division will now be a competitor in the sale of digital marketing products, but that said, right now this is a marketplace begging for a truly compelling solution, and there is a big pot of gold to be had for the one that gets it right.

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