NEW YORK — AT&T Inc. on Monday said it agreed to sell a majority stake in its Yellow Pages business to the private-equity firm Cerberus Capital for $950 million.
The company said it wants to sell shrinking parts of its business so it can focus on growing segments, particularly its wireless business. Revenue from the Yellow Pages unit has shrunk 30 percent in two years.
Phone books were once a cash cow as businesses paid for ads as customers were looking for local stores and services. Even with the steep revenue decline, AT&T’s Yellow Pages unit has been profitable before impairment charges for the last three years.
AT&T, the country’s largest phone company, is following in the footsteps of Verizon Communications Inc., the second-largest, in cutting its phone book business. Verizon spun off its directory business to shareholders in 2006, only to see it file for bankruptcy three years later.
Cerberus is paying AT&T $750 million in cash and a $200 million note, plus a 47 percent stake in YP Holdings LLC which will oversee the business.
The sale affects 8,400 employees and is expected to close mid-year.
The assets being sold include 1,200 printed Yellow Pages editions in 22 states, plus websites like Yellowpages.com and a mobile app. Together, they generated about 3 percent of AT&T’s overall revenue last year.
Source: Associated Press