The following article appeared on Bloomberg.com.
Deutsche Telekom AG (DTE) is nearing an agreement to sell a 70 percent stake in its Scout24 Holding digital-classifieds business to Hellman & Friedman LLC, according to three people familiar with the auction.
The purchase would value the business at about 2 billion euros ($2.7 billion) including debt, said the people, who asked not to be named as the decision hasn’t been made public. An announcement by Bonn-based Deutsche Telekom may come this week, the people said.
Scout24, Germany’s largest real-estate and dating portal, has 14 million monthly users and operates in 22 countries, also providing online classifieds for cars, jobs and travel. Deutsche Telekom this year sought a partner to help expand the business and to generate cash to invest in landline and mobile-phone networks in Europe.
Andreas Fuchs, a spokesman for Deutsche Telekom, declined to comment on the auction, as did Charlotte McMullen, a London representative for San Francisco-based Hellman & Friedman.
Profitability at Deutsche Telekom’s digital business unit, which includes the Scout group, declined last year, with earnings before interest, taxes, depreciation and amortization of 137 million euros, or 16 percent of the division’s 868 million euros in revenue. That compares with a 20 percent margin in 2011.