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Deal will create cableco serving 2.2 million unique subscribers.
Liberty Global late on Tuesday agreed to acquire Multimedia Polska for 3 billion zlotys (€694.4 million) and merge it with its UPC Poland unit.
The all-cash deal brings together the country’s largest and third-largest cablecos, creating a company serving 2.2 million unique customers.
UPC Poland is the bigger of the two, with a network passing 3.1 million homes. It had 1.4 million unique customers and 2.9 million revenue-generating units (RGUs) as of 30 June. By comparison, Multimedia Polska serves 832,000 unique subscribers, has 1.4 million RGUs, and its network passes 1.6 million homes, of which 1.3 million are covered by its hybrid fibre-coaxial (HFC) network.
"This acquisition will significantly increase our scale in Poland," said Liberty Global CEO Mike Fries, in a statement. "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."
Liberty Global will fund the acquisition through a combination of cash on hand and debt. The deal excludes Multimedia Polska’s non-telecom operations, including its insurance, gas and energy businesses.
Liberty Global was named as a potential buyer of Multimedia back in June, when sources claimed the two were holding merger talks. It was suggested at the time that Multimedia’s owners were looking to secure an offer worth at least nine times EBITDA, which may have dissuaded any suitors.
The price agreed with Liberty Global on Monday equates to 6.2 times Multimedia’s adjusted EBITDA in 2015, accounting for PLN124 million (€28.7 million) in projected annual run-rate synergies.
The deal is subject to regulatory approval, which could prove another stumbling block, since it concerns the country’s largest cableco stretching its lead over the competition by snapping up a smaller rival.
If all goes according to plan, Liberty Global expects to complete the acquisition within the next 12 months.
"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," Fries said.
