DENVER — Qwest Communications International Inc. said Tuesday it had wrapped up the $7 billion sale of its Yellow Pages publishing business to a group of private equity firms.
Qwest closed the first phase of the QwestDex deal, for $2.75 billion, in November. The deal covered operations in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota.
On Tuesday, Qwest said it had received $4.3 billion in cash for directory operations in Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming. The deal was finished after regulators in the last remaining state, Arizona, approved the sale Friday.
Qwest will use the money to shave off about $3 billion from its $19.7 billion in debts.
The directory business is now owned by a group of leveraged buyout firms led by The Carlyle Group. The new company will be known as Dex Media and remain based in Colorado's Arapahoe County, near Denver.
The company said it plans to introduce Dex bilingual directories in 16 markets, expand distribution of print directories and CD-ROMs and improve the search capability for qwestdex.com, which gets more than 85 million annual searches.
Dex Media publishes 272 directories, producing 45 million print copies and 670,000 CD-ROMs.
Cory Jackson, an analyst with U.S. Bancorp Piper Jaffray, said the sale will be a boost for Qwest.
"Though the writing has been on the wall, the completion of this transaction should help regain investor confidence in Qwest's ability to turn itself around," Jackson said.
Struggling telecommunications companies have recently found their directory businesses to be among the most profitable because of their steady revenues and predictable cost structure.
Oren Shaffer, Qwest vice chairman and chief financial officer, said the company has implemented a series of initiatives that has generated more than $9 billion in cash liquidity and debt reduction over the past year.
"With the final phase of the QwestDex sale complete, we now have approximately $6 billion in cash after making all currently required debt repayments with the proceeds," he said. He said the transaction helps give the company "a fully funded business plan."
Contributing: Brice Wallace