The Board of Play Communications S.A. (the “Company”) hereby reports that on 25 June 2019, P4 sp. z o.o., a wholly owned subsidiary of the Company (“Play”) have entered into a Preliminary Share Purchase Agreement in connection with the process of sale of all shares in the company 3S Spółka Akcyjna with its registered office in Katowice (“3S”) and indirect acquisition of all shares in all subsidiaries of 3S (hereinafter “Transaction”). The selling parties are Ambrosia CEE Holding S.à r.l. (part of Polish Enterprise Fund VII, a private equity fund managed by Enterprise Investors) and three founders (minority shareholders).

Total Enterprise Value of 3S and its subsidiaries (the “3S Group”) is EUR 96 million (PLN 410 million), while Equity Value is EUR 78 million (PLN 333 million). Acquisition will be financed from own cash and financing available to the Company. Signing of the final agreement is subject to, among others, an approval of the antimonopoly authority.

The Transaction supports the Company’s mobile-centric strategy to develop a lean high-capacity wireless network. As Play gears up for the future 5G roll-out, evolution of urban transmission backhaul to high capacity of fiber connectivity is a necessity, while 3S fiber network has ideal footprint complementary to Play’s radio network. On the one hand, it secures long-term cost control, and on the other hand high speed, low latency and adequate service quality. The Transaction also secures benefits from time-to-market and capital expenditure perspectives as compared to greenfield build scenario.

The acquisition of 3S Group offers Play further opportunities to extend its B2B offering to fiber and data center solutions, leveraging Play’s nationwide salesforce and strong brand, and at the same time enables Play to streamline its own data center operations. The Transaction is built on 10 years of close partnership between the businesses, proving the natural fit of entrepreneurial teams with a challenger mindset.

3S Group has been in the telecommunications industry since 2002. It has built its own optical fiber network of around 3,800 km and the Data Center Cluster. 3S Group provides a variety of bundled telecommunications and data center services for business clients. 3S Group includes the following legal entities: 3S S.A., 3S Data Center S.A., 3S Fibertech sp. z o.o. and 3S BOX S.A. 3S builds and shares optical fiber infrastructure and provides telecommunications services; 3S Data Center provides IT services based on its own data centres in Warsaw, Katowice, Kraków and Bytom, while 3S Fibertech is a fiber network operator serving several hundreds of business clients. In 2018 3S Group generated PLN 88 million of consolidated revenue and PLN 32 million of consolidated EBITDA. 3S Group employs ca. 250 people.

3S Group fast and cost-efficient fiber roll-out model is similar to Play’s approach to nationwide radio access network roll-out. Acquisition of 3S Group will support execution of mobile-centric strategy and generate advantages for Play’s operations:

  • deliver immediate opportunity to connect Play’s existing and future base stations to 3S Group’s fiber network and build leading competencies to further efficiently rollout nationwide transmission fiber backhaul in anticipation of 5G-driven increase in data traffic and growing requirements for mobile network service quality,
  • ensure longterm synergies and cost control of transmission and data center services by operating own fiber network and data centres, protecting the Company from price or availability risks resulting from progressive consolidation of transmission service providers,
  • secure Play’s network independence and strengthen Play’s relation with other backhaul providers, opening opportunities for future partnerships,
  • extend Play’s B2B and wholesale offerings,
  • provide incremental profitable and fastgrowing revenue streams which will support further development of Play.

The acquisition of 3S Group does not change Play’s guidance for 2020 dividend paid based on 2019 results.

Legal basis: Art. 17, point 1 MAR – inside information.