updated 5/17/2005 9:11:53 AM ET 2005-05-17T13:11:53

British phone directory publisher Yell Group PLC announced a deal to buy California-based TransWestern Holdings LP on Tuesday and said it swung to a profit in the last financial year.

Yell said its U.S.-based business, Yellow Book U.S.A. Inc., has agreed to buy TransWestern from private equity groups Thomas H. Lee Partners, CIVC Partners, LLC and TransWestern's management for 829 million pounds ($1.53 billion).

Yell, which owns Britain's Yellow Pages and is the largest independent U.S. directory publisher, said it had long targeted TransWestern as a takeover target because of the U.S. group's coverage in 25 states, including core positions in California and Texas.

TransWestern publishes 332 directories and offers online yellow pages advertising services through WorldPages.com.

"This acquisition establishes Yell as the third-largest directory publisher globally," said John Condron, chief executive of Yell Group. "TransWestern significantly expands and enhances our U.S. platform for future organic growth, brings the potential for material synergies and strengthens our Yellow Book brand."

The deal further consolidates the industry following an announcement Monday by an international consortium led by Australia's Macquarie Capital Alliance Group Ltd. that it will pay 1.83 billion euros ($2.3 billion) to acquire European directories business Yellow Brick Road Group.

Yellow Brick Road, owned by Amsterdam-based publisher 3i Group PLC and New York-based Veronis Suhler Stevenson LLC, has a portfolio in eight European countries. Its products and services include printed telephone directories, online and mobile searches and directory assistance.

Yell, which is facing a competition probe by British regulators, said its acquisition of TransWestern will enhance earnings in the first full year after completion and will deliver annual cost savings of about 37.5 million pounds ($69.05 million) in the third full year of ownership.

Around 55 percent of the company's revenues will from the United States and the remaining 45 percent from Britain — where the company operates under a cap limiting its price increases to below the rate of inflation — following the deal.

The company also reported Tuesday that net profit for the year ending March 31 rose to 94.2 million pounds ($173.42 million). The company recorded a 51.1 million pound loss in fiscal 2004 when it booked 111 million pounds in exceptional costs relating to lawsuits and its initial public offering.

Revenue rose 8.3 percent to 1.3 billion pounds ($2.39 billion).

Britain's Competition Commission is looking into the operations of Yell and its rival Thomson, following suggestions by the government that the pair are dominating competition and profits are too high. It is due to issue its final report by the end of June 2006.

Yell said it is "confident that the development and growth of our business in the U.K. and U.S. will continue unaffected during the investigation."

Shares in Yell rose 2.9 percent to 409.25 pence ($7.54) in morning trading on the London Stock Exchange.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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