Denver, Colorado – (COMMERCIAL THREAD) – 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 that it has entered into a definitive agreement for the sale of 100% of its in Poland to Play, the Polish mobile subsidiary of iliad SA. As of June 30, 2021, our networks in Poland covered 3.7 million households and served 1.5 million customers subscribed to 1.3 million broadband services, 1.4 million video services 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 upon completion. The sale price represents a multiple of approximately 9 times the adjusted EBITDA of UPC Poland estimated for 2021, and nearly 20 times its estimated free operating cash flow for 2021. The closing of the transaction is subject to the satisfaction of the customary closing conditions, including receipt of required regulatory approvals. Closing is currently scheduled for the first half of 2022.
Iliad SA is the parent company of the iliad Group, which operates under the Free banners in France, iliad in Italy and Play in Poland. Play is a consumer-oriented mobile network operator in Poland with over 15 million subscribers. It provides mobile voice, messaging, data and video services to consumers and businesses (especially SMEs) on a contract and prepaid basis under the umbrella brand Play. Its modern and economical 4G LTE / 5G telecommunications network covers 99% of the Polish population.
Mike Fries, CEO of Liberty Global, said: “This transaction highlights, once again, the significant value of fiber-rich HFC networks in Europe, as well as the substantial synergy benefits inherent in fixed-mobile convergence mergers. (“FMC”). . 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 we have had in the communities where we operate. I would like to thank and congratulate the entire management team of UPC Poland, most recently under the leadership of Robert Redeleanu, for their hard work and dedication over the years. UPC Poland, the largest cable TV operator and one of the leading triple play service providers in Poland, and Play, which covers 99% of the Polish population with its mobile services, will together gain momentum from day one to be a powerful force in the Polish market. We strongly support the rationale for this combination and are delighted to see this converged national champion providing high quality connectivity to the Polish market. ”
“The cash proceeds, net of debt repayment, from this sale of assets of approximately $ 600 million will increase Liberty Global’s already large cash balance of $ 4.1 billion.5 as of June 30, 2021. As always, we remain resolutely focused on value creation and are satisfied with the premium valuation we have received for our Polish business, providing a solid return on investment for Liberty Global shareholders.
The proceeds of the sale (net of debt repayment of the UPC banking group) are expected to be used for general corporate purposes, which may include reinvestment in our business and support for the large buyout commitment of multi-year actions of the company.
Along with the transaction, Liberty Global has agreed to provide Play with certain transition services for a period of up to four years. These services will mainly include functions related to networks and information technology. Annual fees will depend on the actual level of services required by Play.
Credit Suisse acted as financial advisor to Liberty Global in connection with the transaction.
Forward-looking statements and disclaimer
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, including statements regarding our strategic outlook, the expected timing of regulatory approvals and closing of the transaction, the expected benefits of the transaction , the amount and intended use of net proceeds, expectations regarding our continuing operations and our cash balance and other information and statements that are not historical facts. These forward-looking statements involve certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include the ability to obtain regulatory approvals for the transaction, as well as to achieve other customary closing conditions, the ability of Play to successfully integrate the combined businesses affected by the transaction and derive the benefits therefrom. expected benefits, as well as other factors detailed from time to time in documents filed by Liberty Global with the Securities and Exchange Commission, including our most recent Forms 10-K / A and 10-Q. These forward-looking statements speak only as of the date of this press release. Liberty Global expressly disclaims any obligation or commitment to release any update or revision to any forward-looking statement contained herein to reflect any change in Liberty Global’s expectations in this regard or any change in the events, conditions or circumstances about which such a statement is based.
ABOUT LIBERTY GLOBAL
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is a global leader in converged broadband, video and mobile communications services. We deliver next-generation products through advanced fiber optic and 5G networks that connect over 85 million subscribers across Europe and the UK. Our businesses operate under some of the best-known consumer brands including Virgin Media-O2 in the UK, VodafoneZiggo in the Netherlands, Telenet in Belgium, Sunrise UPC in Switzerland, Virgin Media in Ireland and UPC in Eastern Europe . Through our massive scale and commitment to innovation, we are building Tomorrow’s Connections Today, investing in the infrastructure and platforms that enable our customers to make the most of the digital revolution, while deploying the advanced technologies that nations and economies need to thrive.
Our consolidated operations generate annual revenues of over $ 7 billion, while our joint ventures in the UK and the Netherlands generate combined annual revenues of over $ 17 billion.
Liberty Global Ventures, our global investment arm, has a portfolio of over 50 companies in content, technology and infrastructure, including strategic holdings in companies such as Plume, ITV, Lions Gate, Univision and the Formula E racing series.
The above revenue figures are provided based on 2020 results and on a combined basis of Virgin Media and O2 UK. For more information, please visit www.libertyglobal.com.
1 Convenience conversion based on the August 31, 2021 USD / PLN spot rate of 0.2611.
2 Adjusted EBITDA selling price multiple calculation is based on UPC Poland 2021 estimated Adjusted EBITDA of PLN 782 million, including PLN 42 million of estimated operating expenses for continuing services. to be provided by Liberty Global to Play as part of the transition services contract and to the exclusion of PLN 76 million of estimated transitional capital-related service charges to be provided by Liberty Global to Play, which we expect to be reported in Play’s Adjusted EBITDA after the trade is completed.
3 Adjusted EBITDA is the primary metric used by our chief operating decision maker to assess segment operational performance and is also a key factor used by our internal decision makers to (i) determine how to allocate resources to segments and (ii) assess performance effectiveness of our management for the purposes of annual and other incentive compensation plans. As we use it, Adjusted EBITDA is defined as profit (loss) before economy (expense) net of taxes, other non-operating income or expense, net gains (losses) on the extinction of the asset. debt, net gains (losses) on transactions in foreign currencies, net gains (losses) on derivative instruments, net interest charges, depreciation and amortization, compensation in shares, provisions and reversals of provisions related to significant litigation and depreciation , restructuring and other operational elements. Other operating items include (a) gains and losses on disposal of long-lived assets, (b) third-party costs directly associated with successful and unsuccessful acquisitions and divestitures, including legal, advisory, and due diligence, if applicable, and (c) other items related to the acquisition, such as gains and losses on the settlement of contingent consideration. Our internal decision makers believe that Adjusted EBITDA is a meaningful measure because it represents a transparent view of our recurring operational performance that is unaffected by our capital structure and allows management to (1) easily view operational trends, (2) perform analytical comparisons and benchmarking between segments and (3) identify strategies to improve operational performance in the different countries in which we operate. We believe that our measure of Adjusted EBITDA, which is a non-GAAP measure, is useful for investors because it is one of the basis for comparing our performance with that of other companies in the same or similar industries, although that our measure may not be directly comparable to similar measures used by other public companies. Adjusted EBITDA should be viewed as a measure of operating performance that complements and does not replace the US GAAP earnings measures included in our statements of earnings. A quantitative reconciliation to profit (loss) for 2021 estimated adjusted EBITDA of UPC Poland cannot be provided without unreasonable efforts, as we do not anticipate certain non-cash charges including depreciation and amortization, restructuring and other operating items included in operating income. Items we do not anticipate may vary significantly from period to period.
4 OFCF is defined as Adjusted EBITDA less additions to property, plant and equipment, as usually defined by Liberty Global. For the purpose of calculating the OFCF sales price multiple, the estimated OFCF of UPC Poland for 2021 has been reduced by PLN 76 million of transitional capital related service charges, which we expect to be reported in. Play’s adjusted EBITDA after closing.
5 Including amounts held in Separately Managed Accounts (SMA).