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In a move that it says expands the reach of its platform, with investments and innovation benefiting Polish consumers and businesses, international TV and broadband company Liberty Global has confirmed that its subsidiary UPC Poland – the leading cable communications and entertainment services provider for consumer and businesses across Poland – has entered into a definitive agreement to acquire the cable business of Multimedia Polska, the third-largest cable operator in Poland, in an all cash transaction.
Multimedia is being valued at an enterprise value of PLN 3 billion (€692m), with the final purchase price subject to potential downward adjustments for the operational and financial performance of Multimedia prior to closing. The PLN 3.0 billion purchase price equates to a multiple of 6.2x Multimedia’s 2015 full-year Adjusted EBITDA when adjusted for PLN 124 million of projected annual run-rate synergies3 derived from revenue and cost-related items.
“This acquisition will significantly increase our scale in Poland, where we are already the largest cable operator,” advised Mike Fries, CEO of Liberty Global. “It will also enhance our ability to invest in cutting-edge products and services for Polish consumers and businesses that will help drive organic growth across our enlarged footprint of over four million premises. Upon closing of the transaction, we will begin upgrading the Multimedia network, after which Multimedia’s customers will be able to enjoy superfast broadband speeds and our next-generation video service Horizon TV.”
The acquisition of Multimedia will be financed through a combination of incremental debt borrowings and cash on hand. The transaction excludes Multimedia’s existing insurance, gas and energy operations (Non-Telecom Businesses), which will be retained by the shareholders of Multimedia. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close within the next twelve months.
With over four million passed homes and businesses, the combined operations of UPC Poland and Multimedia will be able to compete more effectively to the benefit of Polish consumers and businesses alike. As of June 30, 2016, UPC Poland passed 3.1 million homes, or around 20 per cent of total households in Poland, serving 1.4 million unique customers who subscribed to 2.9 million cable subscription services. At the end of the second quarter of 2016, Multimedia passed 1.6 million homes4 mainly through its hybrid fibre-coaxial cable network, serving 832,000 unique customers who subscribed to 1.4 million subscription services consisting of 643,000 video, 491,000 broadband and 241,000 telephony RGUs. In addition, Multimedia had 54,000 mobile subscribers at June 30, 2016.
Multimedia offers digital television with video on demand (VoD), broadband and mobile data, fixed-line and mobile voice. As of the end of June 2016, the number of homes passed by Multimedia networks reached circa 1.63 million. As of the end of June 2016, Multimedia provided its services to a total of some 832,000 customers of which some 310,000 customers used two Multimedia services (among TV, voice, Internet and other) and some 129,000 multi-play clients used three or more services. Multimedia was one of the first Polish operators to launch digital television services for its telephony subscribers (IPTV), triple play bundles, broadband Internet, High Definition Television (HDTV) with return path, VoD and multiscreen (video accessible on tablets and smartphones).