Yellow Media Inc. Announces the Divestiture of Trader Corporation

  • Sale of automotive assets for $745 million
  • Focus on core business and YPG’s digital transformation
  • Strengthening capital structure

Montreal (Quebec), March 25, 2011 – Yellow Media Inc. (TSX: YLO) announces that it has reached a definitive agreement to sell Trader Corporation (“Trader”) to funds advised by Apax Partners for a purchase price consideration of $745M. Closing of the contemplated transaction is expected to occur in June 2011, subject to regulatory approvals and other customary conditions.

“This divestiture is attractive for our shareholders and will allow us to deploy capital in our core business, helping accelerate our digital transformation while further strengthening our capital structure,” said Marc P. Tellier, President and Chief Executive Officer of Yellow Media Inc. “As Canada's number one Internet company, we want to focus our efforts on the acceleration of our digital transformation via our Yellow Pages 360° Solution.”

Trader was formed in June 2006 with the integration of Classified Media (Canada) Holdings Inc. (Trader Canada) and Trader Media Corporation (TMC). Trader publishes approximately 160 publications and 22 web sites covering four product verticals: automotive, real estate, general merchandise and employment.

Trader will continue to own and operate leading Canadian automotive and generalist online properties including AutoTrader.ca, Autos.ca, AutoHebdo.net, and Buysell.com, as well as 74 related publications.  In addition, Trader will retain its interest of approximately 30% in Dealer.com, the leading US digital solutions provider to the automotive dealer segment.

The real estate, employment and LesPAC.com businesses are excluded from the proposed divestiture. These businesses will continue to be owned and managed by Yellow Media Inc.

The purchase price consideration of $745M, subject to working capital and other adjustments, will be payable in cash at closing.  The transaction has fully committed financing, consisting of equity provided by Apax Partners and financing commitments provided by RBC Capital Markets. The proceeds from this divestiture will be largely used to reduce indebtedness and for general corporate purposes.

Concurrent with this announcement, Standard & Poor’s and DBRS confirmed their credit ratings for Yellow Media Inc.

TD Securities Inc. and Morgan Stanley acted as financial advisors to Yellow Media Inc.

About Yellow Media Inc.
Yellow Media Inc. (TSX: YLO) is Canada’s #1 Internet company through its network of companies that include Yellow Pages Group, Trader Corporation and Canpages. Yellow Media Inc. owns and operates some of Canada’s leading properties and publications including Yellow Pages™ directories, YellowPages.ca™, Canada411.ca™, AutoTrader.ca™, Autos.ca, RedFlagDeals.com, and LesPAC.com. Its online destinations reach over 11M unique visitors monthly and its mobile applications for finding local businesses, deals and vehicles have been downloaded over 2M times. Yellow Media Inc. is also a leader in national digital advertising through Mediative, a digital advertising and marketing solutions provider to national agencies and advertisers. For more information, visit corporate.yp.ca.

About Apax Partners
Apax Partners is one of the world’s leading private equity investment groups. It operates across the United States, Europe and Asia and has more than 30 years of investing experience. Funds under the advice and management of Apax Partners globally total around $40 billion. These Funds provide long-term equity financing to build and strengthen world-class companies. Apax Partners Funds invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Financial & Business Services. For more information visit: www.apax.com.

Precaution Concerning Forward-Looking Statements
This press release contains forward-looking statements about the objectives, business and affairs of Yellow Media Inc. These statements are forward-looking as they are based on our current expectations, as at March 25, 2011, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. We disclaim any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available, as a result of future events or for any other reason.

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Contacts:

Investor Relations
Anne-Sophie Roy
Director – Corporate Finance
and Investor Relations
Tel.: (514) 934-2828
anne-sophie.roy@ypg.com

Media
Annie Marsolais
Director, Corporate Communications
Tel.: (514) 934-4016
annie.marsolais@ypg.com