Liberty Global has agreed to sell UPC Poland to iliad’s Polish mobile subsidiary Play a total enterprise value of $1.8 billion.
Liberty Global’s 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 at June 30, 2021.
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. The closing is currently expected to occur in the first half of 2022.
Iliad 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.
“This transaction highlights the significant value of fiber-rich HFC networks in Europe, as well as the substantial synergy benefits inherent in fixed-mobile convergence (FMC) mergers,” Liberty Global CEO Mike Fries said.
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 billion as of June 30, 2021.
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 the business and support for the company’s significant, multi-year share buyback commitment.
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.