MONTREAL - Yellow Pages Ltd. (Y.TO) says that its wholly-owned subsidiary has reached a deal to sell its RedFlagDeals division to VerticalScope Inc. for $12 million.

The payment will be made in two instalments, half the total when the transaction closes around Aug. 22 and the rest when unspecified conditions are met.

Yellow Pages CEO David Eckert says the sale frees up resources that will be devoted to its core business.

The Montreal-based company has been working to transform itself from a publisher of printed directories to a digital model.

In addition to the Yellow Pages print directories, its online properties include YP.ca, Canada411.ca, 411.ca, Bookenda.com and YP Shopwise.

The Toronto Star owns a majority interest in VerticalScope.