Qwest Communications Agreed to Sell Its Slow but Steadily Growing

question 142

Essay

Qwest Communications agreed to sell its slow but steadily growing yellow pages business, QwestDex, to a consortium led by the Carlyle Group and Welsh, Carson, Anderson and Stowe for $7.1 billion in late 2002. Why do you believe the private equity groups found the yellow pages business attractive? Explain the following statement: "A business with high growth potential may not be a good candidate for an LBO."

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Definitions:

Buildings

Fixed assets that refer to structures used for business operations, such as offices, factories, and warehouses, represented on the balance sheet and subject to depreciation.

Land

A fixed asset representing the ownership of physical real estate or ground, not depreciated over time in accounting practices.

Machinery and Equipment

These are tangible assets used in the operations of a business, often involved in the manufacturing, production, or service delivery processes.

Land Improvements

Enhancements made to a parcel of land to increase its value or usability, such as landscaping, fencing, and installation of utilities, which are usually depreciable over their useful life.