8. 2006 OUTLOOK
We maintain our revised guidance provided on August 10, 2005, following the ADS acquisition.
The Outlook was then revised in order to reflect the impact of our new national platform on growth. We remain confident that the Adjusted Revenue growth, adjusted for comparability purposes by taking into account the results of ADS for the corresponding periods in 2005, will range between 4% to 5% in 2006.
As a result of the synergies created within the new combined business following the execution of the integration plan, we continue to anticipate that in 2006, Adjusted EBITDA on a comparable basis, will grow by 4% to 7%.
The increase in distributions per unit is still targeted at 6% in 2006 as a result of an expected increase in distributable cash following the ADS acquisition.
NEW ACQUISITIONS
On December 12, 2005, we entered into a definitive agreement to acquire Trader Media Corporation (“TMC”) for approximately $436 million. The TMC Transaction closed on February 14, 2006. Consequently, this transaction has not been reflected in the financial statements for the year ending on December 31, 2005 and will be accounted for upon closing. The purchase price consideration was comprised of $135 million paid in cash at closing and the issuance of 19 million exchangeable units of YPG LP for a principal amount of $301 million at a price of $15.85 per unit. The Exchangeable Units are exchangeable on a one-for-one basis at any time at the option of the holder into units of Yellow Pages Income Fund. The holders of the Exchangeable Units will be entitled to receive equivalent distributions to unitholders of Yellow Pages Income Fund.
The cash portion of this acquisition was financed through existing credit facilities and had no impact on YPG's overall credit profile.
Strategic rationale
TMC is a company operating in local print and online classified advertising for the automotive, real estate and employment sectors. Principally specialized in automotive and real estate advertising, TMC has 65 print publications. It also hosts eight web sites.
This acquisition marks a significant step in expanding our business into related media. Management considers TMC's business model to be an excellent fit given that it involves local advertising content, direct customer contact, and well-known print and online products.
Strong financial metrics
TMC generated revenues of approximately $133 million and Adjusted EBITDA of approximately $42 million in 2005. It also generated strong free cash flow.
INCREASE IN CASH DISTRIBUTIONS
On February 15, 2006, we announced an increase in our cash distributions from an annualized rate of $0.96 to $1.03 per unit. The increase will be effective for Unitholders of record on February 28, 2006 payable on March 15, 2006.
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