Babcock & Brown Capital Acquires 100% of Golden Pages from Markstone Capital Partners

TEL AVIV, Israel, Aug. 1 /PRNewswire/ -- Babcock & BrownTelecommunications, Directories & Media Investments Pte Ltd, a wholly ownedsubsidiary of Babcock & Brown Capital (BCM) has today acquired 100% ofG.P.M. Classified Directories (Management & Marketing) Ltd. (GPM) fromMarkstone Capital Partners (Markstone) and other Israeli-basedinstitutional shareholders. The acquisition price for 100% of the equity of GPM is approximatelyU.S. $123 million representing an enterprise value of approximately U.S.$215 million. GPM GPM is Israel's leading yellow page, local search and directory-relatedcompany. The GPM group includes Golden Pages, Israel's yellow pagesbusiness which is the dominant directory franchise in the country, as wellas a number of other complementary print and online businesses, includingZAP, Israel's premier comparative shopping website, REST, Israel's premierrestaurant directory business, Pro group, Israel's premier student portal,and 55% of Dun & Bradstreet Israel, the country's premier businessdirectory. BCM BCM is an externally managed investment vehicle listed on theAustralian Securities Exchange. It is managed by international investmentand advisory firm Babcock & Brown (ASX: BNB) who recently announced theestablishment of an office in Israel. BCM intends to continue to support GPM's existing growth strategy,including funding GPM in making further acquisitions, and helping GPM toexplore offshore growth and acquisition opportunities. All key managementwill remain with the GPM businesses under BNB ownership. Markstone Markstone is Israel's largest private equity fund with just under $800million under management. The fund is dedicated to investments in Israel'sold economy. Markstone is managed by Elliott Broidy, Ron Lubash and AmirKess and maintains offices in Tel Aviv and Los Angeles Markstone acquired GPM in 2004, and has since developed a new businessstrategy and recruited a largely new and highly talented management team toGPM. In the last several years the new management team, with Markstone'ssupport, has successfully revitalized the Golden Pages business, improvedoperations, enhanced the brand and market positioning, and transitioned atraditional print directory business into a multi-platform environment,drawing on cutting-edge Israeli technology expertise. As a result, GPM hasexperienced strong revenue and profit growth over the past 3 years, andnon-print activity now accounts for more than 25% of total revenue. Markstone's chairman Elliott Broidy commented: "For the second time inrecent weeks, Markstone Capital Partners has delivered on its promise toprovide superior returns to our investors. Since acquiring GPM in 2004 wehave been very active in supporting the company and its aggressiveexpansion plans. GPM has continued to mature and is now moving onto higherplanes under great new ownership." Ron Lubash and Amir Kess, joint managing directors of Markstone, actedas joint chairmen of GPM. Kess said today that: "Markstone formed andsuccessfully applied a clear and focused strategy at GPM and was able todemonstrate the value creation benefits of active ownership, translatinginto better returns for our investors." Lubash continued: "We are alsopleased that prominent Israeli institutional investors chose to supportGPM's growth during 2006, and are now benefiting from that decision." GPM Chief Executive Officer, Mr. Nir Lempert, said, "All of us at GPMwelcome the transaction announced today. Markstone has been an excellentowner of GPM. They have driven the transformation of our business strategyresulting in our achieving strong growth and profitability in all areas ofour operations. The time is now right to transition the business fromMarkstone to BCM, a global strategic owner who is able to provide strongsupport for the continuing growth expected in GPM's businesses. We see manyexpansion opportunities for GPM, both organically and through acquisition,domestically and overseas, and we believe that BCM will be a supportiveshareholder as we move forward." Robert Topfer, BCM, Executive Director, said, "the acquisition of GPMvalidates the hard work of GPM's management over the past few years, thequality of the GPM businesses and the strong fundamentals of Israel'seconomy. We believe the future for GPM is exciting, and we look forward toparticipating actively in helping to shape that future." For further information, contact the joint public relations coordinator: Benny Cohen Cohen Rimon Cohen Tel: +972-3- 6081133 Cell: +972-50 - 5522333 http://www.crc.co.il About Babcock & Brown Capital and BBTDM Babcock & Brown Capital Limited (ASX: BCM) is listed on the AustralianStock Exchange and aims to take significant/controlling investments in aconcentrated portfolio with a flexible investment horizon. It has theability to identify and execute investment opportunities worldwideutilising the Babcock & Brown network. BCM has invested approximately 50%of the $1 billion capital it raised in its initial IPO in 2004. In August 2006, BCM successfully completed an $8 billion takeover offerfor eircom Group plc, the incumbent Irish telecommunications operator. Thistransaction was one of the larger private equity deals completed in Europein 2006. The offer was made in conjunction with the eircom Employee ShareOwnership Trust ("ESOT"). The Babcock & Brown Group now holds 65% (BCM owns57.1% directly) and the ESOT holds 35% of eircom. BBTDM is a wholly owned subsidiary of BCM, established for the purposeof identifying and executing telecommunications, directories and mediainvestments in targeted high growth sectors and emerging markets. For further information on BCM see http://www.babcockbrowncapital.com About Babcock & Brown Babcock & Brown is a global investment and advisory firm withlongstanding capabilities in structured finance and the creation,syndication and management of asset and cash flow-based investments. Babcock & Brown was founded in 1977 and is listed on the AustralianStock Exchange (ASX: BNB). Babcock & Brown operates from 29 offices acrossAustralia, North America, Europe, Asia, Middle East and Africa and has inexcess of 1000 employees worldwide. Babcock & Brown has five operatingdivisions including real estate, infrastructure and project finance,operating leasing, structured finance and corporate finance. The companyhas established a funds management platform across the operating divisionsthat have resulted in the creation of a number of focused investmentvehicles in areas including real estate, renewable energy andinfrastructure. For further information about Babcock & Brown please seehttp://www.babcockbrown.com About Markstone Markstone is an $800 million private equity fund and is the largestfund focused on investment in Israeli companies. Markstone is managed byElliott Broidy, Ron Lubash and Amir Kess. Since its inception at thebeginning of 2004, Markstone has made seven investments in Israelicompanies, including GPM, Netafim, Nilit, Steimatzky, Prisma, PRS andZeraim Gedera, and anticipates further significant investments in the nearfuture. The fund invests primarily in companies with operations in the "oldeconomy" sector. Markstone has offices in Tel Aviv and Los Angeles. For further information on Markstone see http://www.markstonecapital.com About GPM GPM is a leading Israeli group operating mainly in the classifiedadvertising market. The group comprises of several companies, all aimed atbringing buyers and sellers together via printed directories, onlinedirectories, mobile services and other digital-based applications. Thegroup includes Golden Pages, Israel's long-standing yellow pages business(established in 1968), as well as a number of other complementary print andonline businesses, such as ZAP, Israel's premier price-comparison website,REST, Israel's premier restaurant directory business, Pro group, Israel'spremier student portal, and 55% of Dun & Bradstreet Israel, the country'spremier business info directory. For more info about GPM, visit http://www.d.co.il