Liberty Global plc (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and LBTYK), one of the world’s leading converged video, broadband and mobile communications companies, today announced it has reached a definitive agreement to sell 100% of its operations in Poland to iliad S.A.’s Polish mobile subsidiary Play. At June 30, 2021, our networks in Poland passed 3.7 million homes and served 1.5 million customers who subscribed to 1.3 million broadband, 1.4 million video, and over 600,000 telephony services.
Liberty Global has agreed to sell UPC Poland for a total enterprise value of PLN 7.0 billion ($1.8 billion) subject to customary debt and working capital adjustments at completion. The sale price represents a multiple of approximately 9x UPC Poland’s estimated 2021 Adjusted EBITDA, and nearly 20x its estimated 2021 operating free cash flow. Closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of requisite regulatory approvals. The closing is currently expected to occur in the first half of 2022.
Iliad S.A. is the parent company of the iliad Group, which operates under the trade names of Free in France, iliad in Italy and Play in Poland. Play is a consumer-focused mobile network operator in Poland with over 15 million subscribers. It provides mobile voice, messaging, data and video services for both consumers and businesses (in particular SMEs) on a contract and prepaid basis under the umbrella brand Play. Its modern and cost-efficient 4G LTE/5G telecommunications network covers 99% of the Polish population.
Mike Fries, Chief Executive Officer of Liberty Global said, “This transaction highlights, yet again, the significant value of fiber-rich HFC networks in Europe, as well as the substantial synergy benefits inherent in fixed-mobile convergence (“FMC”) mergers. We have been operating in Poland for over 20 years and are proud of our contributions to the country’s growing digital economy and the impact that we’ve made in the communities where we operate. I’d like to thank and commend the entire UPC Poland management team, most recently under Robert Redeleanu’s leadership, for their hard work and dedication over the years. UPC Poland, the largest cable television operator and a leading provider of triple play services in Poland, and Play, which covers 99% of the Polish population with its mobile services, together will have the scale from Day 1 to be a powerful force in the Polish market. We are highly supportive of the rationale behind this combination and are excited to watch this converged national champion deliver high-quality connectivity across the Polish market.”
“The cash proceeds, net of debt repayment, from this asset sale of approximately $600 million will boost Liberty Global’s already substantial cash balance, which stood at $4.1 billion5 as of June 30, 2021. As ever, we remain squarely focused on value creation and are pleased with the premium valuation we received for our Polish business, providing a strong return for Liberty Global shareholders.”
Proceeds from the sale (net of debt repayment at the UPC bank group) are expected to be used for general corporate purposes, which may include reinvestment into our business and support for the company’s significant, multi-year share buyback commitment.
In conjunction with the transaction, Liberty Global has agreed to provide Play with certain transitional services for a period of up to four years. These services principally will be comprised of network and information technology-related functions. Annual charges will depend upon the actual level of services required by Play.
Credit Suisse acted as financial advisor to Liberty Global on the transaction.
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our strategic outlook, the anticipated timing of regulatory approvals and closing of the transaction, the expected benefits of the transaction, the amount and expected use of net proceeds, expectations with respect to our continuing operations and our cash balance and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include the ability to obtain regulatory approvals for the transaction, as well as achieve other customary closing conditions, the ability of Play to successfully integrate the combined businesses impacted by the transaction and achieve the anticipated benefits thereof, as well as other factors detailed from time to time in Liberty Global’s filings with the Securities and Exchange Commission including our most recently filed Form 10-K/A and Forms 10-Q. These forward-looking statements speak only as of the date of this release. Liberty Global expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Global’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.