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Telenet to acquire BASE Company for €1.325 billion to secure its future as a leading integrated communications provider

Mechelen, 20 April 2015 - Telenet Group Holding NV (Euronext Brussels: TNET) has entered into a definitive agreement to acquire BASE Company NV for €€1.325 billion from Koninklijke KPN N.V. This acquisition would provide Telenet long-term mobile access to effectively compete for future growth opportunities in the mobile market. As a result of the acquisition, Telenet would be able to meet the rising demand from both residential and business customers for the full range of fixed and mobile services, and to continue providing an amazing customer experience.

Key Highlights

  • Telenet announces that it has signed a definitive agreement to acquire BASE Company for €€1.325 billion
  • The acquisition values BASE Company at a multiple of 8.0x BASE Company's 2015E EBITDA as adjusted by Telenet ("Adjusted EBITDA") and 5.0x Adjusted EBITDA, as adjusted for projected annual run-rate synergies and one-off investments
  • The combination of Telenet and BASE Company will create a leading integrated communications provider in Belgium with combined 2014 adjusted revenue of € 2.4 billion and Adjusted EBITDA of €€1.1 billion
  • In order to fully compete for the future growth opportunity of mobile data and to be able to provide an amazing customer experience on mobile comparable to Telenet's demonstrated track record in fixed and mobile to date, Telenet will make expenditures of around €€240 million, including targeted investments in BASE Company's mobile network and integration costs, most of which will occur over the next few years. This considerable investment will complement the earlier announced €500 million investment in Telenet's HFC network as part of the "De Grote Netwerf" program, providing a strong impetus to the Belgian digital economy
  • Telenet expects to achieve combined annual run-rate opex and capex synergies of approximately €€150 million, driven in large part by the migration of Telenet's mobile telephony subscriber base to the BASE Company network
  • Telenet intends to finance the acquisition through a combination of €€1.0 billion of new debt facilities and existing liquidity
  • On a pro-forma basis and excluding synergies, Telenet's net leverage ratio as of December 31, 2014 would have been approximately 4.45x compared to 3.7x on a reported basis, which is well within Telenet's long-term target range and financial covenants
  • The transaction is subject to the approval from the relevant competition authorities

John Porter, CEO of Telenet: "We are very pleased with this important strategic and complementary acquisition and the benefits that it will deliver to all stakeholders, including an enhanced customer experience for both our and BASE Company's mobile subscribers, resulting in an improved long-term growth profile for the combined company. Mid-2012, we rejuvenated the Belgian market with the launch of our simple and transparent "King" and "Kong" mobile offers, underpinning the innovative spirit that we carry in our corporate DNA. And more recently, we also launched our "Family Deal" packages, offering a recurring monthly discount on multiple SIMs in the home for both existing and new triple-play subscribers. Through the acquisition of BASE Company we have made a significant step to secure long-term mobile access conditions, ensuring we are well positioned to effectively compete for the future growth opportunity of mobile data."