Marc Tellier, chief executive of Yellow Media Inc., formerly Yellow Pages, shows the company's new logoRyan Remiorz
Yellow Media Inc. - the Montreal-based phone-book publisher that has just rebranded itself to reflect its growing online presence - is swallowing Canpages Inc., a Vancouver-based upstart that had been making its own acquisitions in a bid to win market share away from its giant rival.
Yellow Media said Tuesday it has struck an agreement to buy the Canpages business in a transaction valued at $225-million.
The deal gives Yellow Media - the former Yellow Pages - a greater exposure to the fast-rising sector of online searches and social media as the market for print directories shrinks.
Under the guidance of president and chief executive officer Marc Tellier, Yellow Media has been positioning itself to boost revenue from online advertising.
"The acquisition of Canpages will accelerate our business transformation to the digital world," Mr. Tellier said in a statement Tuesday.
"Canpages has built a strong local search business and we are pleased with the prospects of joining forces. It will give us the opportunity to expand our sales force, online capabilities and customer offerings."
Canpages last year made several acquisitions in a bid to build up its online and social media business, with a mix of friend networks and phone listings. It also launched last year Street Scene, a rival to Google Inc.'s Street View online service providing sweeping 360-degree snapshots of streets.
In the deal to acquire Canpages, Yellow Media will pay $75-million in cash and issue $150-million worth of promissory notes to an investor group led by HM Capital Partners, a private equity firm.
The notes are eventually convertible into Yellow Media shares, providing the current owners of Canpages a minority holding in Yellow Media.
Canpages employs about 700 people.