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The Kelsey Report® Advisory

Consolidation in the Nordic Markets
Charles Laughlin , 9/27/2005

SUMMARY: The Swedish publisher Eniro AB announced Monday that it is buying its Norwegian rival, Findexa A/S, for a combination of cash and new shares worth roughly 7.9 billion Swedish kroner (about US$1.01 billion). Including the assumption of debt, the value of the deal will reach 10.5 billion kroner. The Kelsey Group estimates that Eniro is paying about 11.5 times Findexas 2004 earnings before interest, taxes, depreciation and amortization (EBITDA) at the full transaction value to acquire the company. While this is a healthy multiple, it is in line with recent directory deals. If finalized, it will further strengthen Eniros position in the Nordic market, giving it the dominant position in print and online directories in Sweden and Norway, along with a challenger position in Denmark and a strong competitor position in Finland.

Eniro CEO Tomas Franzen is positioning the pact as a way to strengthen its home market position, increase cost efficiency and develop a more efficient capital structure. Also, in an era where Eniros core business in Sweden has faltered, acquisition growth can serve as a substitute for core growth, and the increased scale gives Eniro more customers to reach with multiple product offerings. Eniro was a very strong print plus online player in the Nordic market before this agreement. After Findexa, it would appear that all roads to the Nordic small and medium-sized enterprise (SME) market lead will pass through Eniros headquarters in Stockholm.

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