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Yellow Book Acquires National Directory Company

TUSTIN, Calif. (January 13, 2003) —Yellow Book USA has completed the $69 million purchase of National Directory Company (NDC), based in Southern California, from NDC parent company Three Cities Research. New York-based media merchant bank Veronis Suhler Stevenson served as M&A advisor for Three Cities.

Yellow Book USA publishes yellow pages directories in more states than any other publisher. With the NDC acquisition, its nearly 600 information-packed directories now reach 40 states plus the District of Columbia, serving some 71 million homes and businesses. Yellow Book's success has been based on providing more buying information to the consumer, the end user of its directories. Consumers in the Southwestern U.S. will enjoy the benefits of this same successful strategy.

NDC, headquartered in Tustin, CA, 35 miles south of Los Angeles, is the sixth largest independent publisher of yellow pages directories in the United States. NDC currently publishes 48 directories throughout California, Arizona and New Mexico with revenue of $53 million. NDC and its predecessors have been publishing yellow pages directories in California for more than 20 years. NDC’s staff of 340 will remain with Yellow Book.

“The consolidation in the directory field continues with the addition of National Directory Company to Yellow Book,” said Andrew Buchholtz, Managing Director of Veronis Suhler Stevenson. “This gives an already strong company an excellent springboard for growth in some key markets in the Southwest.”

“The Southwestern U.S. is a dynamic market area that Yellow Book has been looking at for a while, just waiting for the right vehicle. NDC provides an ideal platform for Yellow Book's entry into the Southwestern U.S.” said Joe Walsh, Chief Executive Officer of Yellow Book USA. “Yellow Book brings a national brand, product expertise, and deep resources. Add that to the local knowledge and customer relationships of NDC employees and the result will be a one-two punch to the competition, breaking the utility monopoly.”

Stephen C. Haberstick, NDC Yellow Pages CEO and Chairman, said, “We are thrilled to become part of Yellow Book USA, the leading independent directory publisher in the nation. Everyone benefits from the acquisition. Like NDC, Yellow Book is a first class company that focuses on the end user by putting out quality products that consumers know and use. Our employees benefit by having more career opportunities. Our advertisers benefit by getting more advertising value from the powerful Yellow Book brand name. Yellow Book will give us the resources and support we need to accelerate our growth in our existing and new markets.”

The NDC purchase is Yellow Book's second major acquisition in 2002. Earlier this year, Yellow Book acquired McLeodUSA Publishing, a leading yellow pages publisher located in the Midwest.

Veronis Suhler Stevenson is a leading independent merchant bank dedicated to the media, communications and information industries. VS&A Communications Partners III, LP (Fund III) is the third private equity fund managed by Veronis Suhler Stevenson. Capitalized at $1 billion, it is one of the largest private equity funds dedicated exclusively to investments in the media, communications and information industries. Together with Fund III's predecessor funds, VS&A Communications Partners have invested in 28 platform companies across media segments and the realized and unrealized enterprise value of these investments total over $5 billion.



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