Carlyle Group and Welsh, Carson, Anderson & Stowe Purchase Qwest's Yellow Pages Unit for $7.05 Billion

New York, NY – Global private equity firms The Carlyle Group (Carlyle) and Welsh, Carson, Anderson & Stowe (WCAS) today announced that they have agreed to purchase Qwest Communications’ yellow pages directories business, known as QwestDex, for $7.05 billion. This deal is the largest U.S. buyout since 1989.

James Attwood, Carlyle Managing Director said, “This is a classic win-win transaction: It’s great for our investors and helps Dick Notebaert and his team achieve their objectives of deleveraging the Qwest balance sheet and improving their liquidity position. Our investors will benefit from the stable, predictable cash flows of the directories business without assuming the risks that characterize many other telecom-related investments today.”

“We are looking forward to partnering with the Dex management team and employees in this exciting new chapter in the evolution of the Dex business,” said Anthony deNicola, General Partner at WCAS. “Dex is a terrific company, and we are delighted to be investing in its future.”

The transaction will be completed in two stages. The first stage, involving the sale of QwestDex operations in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota, and South Dakota, is for $2.75 billion and is expected to close in the fourth quarter of 2002. The second phase, which includes Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming, is for $4.30 billion and is expected to close in 2003.

The new company will be the exclusive publisher of QwestDex directories in the states where Qwest provides local service, and will maintain current directory publishing dates and obligations, under a 50-year agreement.

Carlyle and WCAS will share the equity investmen t equally and may seek co-investment. Debt financing will be provided by JPMorgan, Bank of America, Deutsche Bank, Lehman Brothers and Wachovia Securities. JPMorgan Securities is serving as M&Amp;A advisor, and Latham & Watkins is serving as legal counsel.