Liberty Global announced a definitive agreement to sell its operations in Poland to Iliad's Polish mobile subsidiary Play. The deal gives UPC Poland an enterprise value of PLN 7.0 billion (EUR 1.53 billion) and allows Iliad to form a converged business in Poland with both fixed and mobile networks.
The companies already announced in July that they were in talks on a takeover. Iliad said the deal creates the second-largest operator in Poland, with pro forma revenues of EUR 1.96 billion in 2020 and EBITDAal of EUR 697 million. UPC counts around 1.5 million subscribers on a cable network passing 3.7 million homes, while Play has over 15 million mobile customers.
The takeover price is equal to 9.3x UPC's EBITDAaL for 2020, or 7x that amount after the expected revenue and cost synergies, Iliad said. It will finance the deal with Play's cash and debt.
Liberty Global said the sale price is equal to 9x UPC Poland's estimated 2021 adjusted EBITDA and nearly 20x operating free cash flow. Liberty Global expects cash proceeds of USD 600 million, net of debt, from the sale, which will go to general corporate purposes.
In conjunction with the transaction, Liberty Global has agreed to provide Play with certain transitional services for a period of up to four years, including network and IT functions. Annual charges will depend upon the actual level of services required by Play.
Closing of the transaction is subject to regulatory approvals and is expected to occur in the first half of 2022.
