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Veronis Suhler Stevenson and 3i Announce Agreement to Purchase Verizon Information Services’ European Directory Operations

NEW YORK/LONDON (May 5, 2003) – VS&A Communications Partners III, LP (Fund III), the private equity fund affiliated with New York-based media merchant bank Veronis Suhler Stevenson (VSS) and 3i Group Plc (3i), Europe’s leading venture capital company, announced an agreement to purchase six European directory operations of Verizon Information Services (VIS), for an undisclosed amount. VIS is a unit of Verizon Communications. The deal is a combination of stock and asset acquisitions and is expected to close upon completion of regulatory approvals. CIBC World Markets plc is the sole underwriter of the senior and mezzanine financing placed in conjunction with the transaction.

The acquisitions consist of VIS operations in Austria, Czech Republic, Hungary, Poland, Slovakia and Gibraltar and will affect approximately 2,000 employees. A new holding company will be based in Austria, under which the operations will conduct business using their existing company names and directory brands.

This investment continues the strategic relationship between VSS and 3i in the European directory sector, in which the two firms have partnered to jointly invest in leading European directory publishers. With the close of this transaction, VSS and 3i will have co-investments in eight European companies, totaling 313 directories with a combined circulation of 31.7 million.

“This is an attractive business that builds on the momentum of our own private equity investments, alongside VSS and 3i’s existing investments in European directory publishing and the significant growth opportunities we’re seeing,” said Marco Sodi, partner at VSS and head of the firm’s London office.

Chris Graham, director of 3i’s Media Team, added, “This is a landmark deal which is a further example of 3i’s commitment to the media sector. Investing alongside VSS, one of the leading media investors, demonstrates our knowledge and ability to execute another media directories deal. We know the industry well, and having looked at a variety of opportunities, we believe this business to be one of the fastest growing in the marketplace.”

VSS Managing Director Gerhard Weisschaedel will become the CEO of the new group. Mr. Weisschaedel joined VSS in 2000 from Deutsche Telekom Medien, the publishing and multimedia division of Deutsche Telecom, where he served as the Chief Executive Officer for four years. Incumbent country managers will remain in their positions, with Jon Martinsen heading the Austrian and Hungarian units, René Pekárek in charge of the Czech and Slovakian units, and David McGuffey leading the Polish and Gibraltar units.

“We look forward to working with the existing management and building upon their success,” said Mr. Weisschaedel.

VSS and 3i have forged their partnership through two prior acquisitions in the European directory sector. In February 2003, VSS and 3i completed the purchase of Netherlands-based De Telefoongids Media BV (formerly TeleMedia), the telephone directory company of Royal KPN N.V., for €500 million ($502.2 million). In March 2002, VSS and 3i co-invested in the €111.5 million ($96 million) buyout of Finland-based Sonera Info Communications Ltd., renamed Fonecta Oy, one of Finland’s largest directory publishers and one of Europe's leading telephone directory services providers.

“We’ve been very happy with the performance of Fonecta, which has outperformed expectations,” said Mr. Sodi. “Our investment in the Netherlands, although a recent investment, is meeting the high expectations we set for the business and management team, and we look forward to carrying this momentum into these new markets.”

Previously, VSS has been active in the U.S. directory publishing sector. The firm, through VS&A Communications Partners II LP, acquired Yellow Book USA. The company was later sold to British Telecommunications in 1999 for approximately $665 million.

About Verizon Information Services:
Verizon Information Services, a unit of Verizon Communications, is the world’s leading print and online directory publisher, a content provider for communications products and services, and the largest publishers of Hispanic directories in the U.S. The company publishes directories, sells Yellow Pages advertising, and/or provides consulting services for directories in the U.S. and seven countries outside the U.S.: Belize, Brunei, Canada, China, Costa Rica, Dominican Republic and Puerto Rico.

About Veronis Suhler Stevenson:
Veronis Suhler Stevenson is a leading independent merchant bank dedicated to the media, communications and information industries. VSS has completed over 600 transactions since its inception in 1981. The firm has acted as a financial advisor across the full spectrum of 13 media industry segments and provides the following services: mergers & acquisitions advisory services and private equity investment. VS&A Communications Partners III, LP 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 has invested in 31 platform companies across multiple media segments; the realized and unrealized enterprise value of these investments total approximately $5 billion.

About 3i:
3i brings capital, knowledge and connections to the creation and development of businesses around the world. It invests in a wide range of opportunities from start-ups to buy-outs and buy-ins, focusing on businesses with high growth potential and strong management. 3i invests in businesses across three continents through local investment teams in Europe, Asia Pacific and the USA. To date, 3i has invested over €23.2 billion (including co-investment funds). In the 6 months to 30 September 2002, an average of €4.8 million (including co-investment funds) was invested each working day.

Contacts:

VSS London contact:
Marco Sodi, partner,
Morgan Callagy, director,
VSS Main office: , Fax:

3i contact:
Ingrid Tighe, press office manager:

Verizon Information Services contact:
DeAnna Causey Kriege, senior staff consultant:









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