Creation of the New Netia

Completion of the Dialog and Crowley acquistion transactions by Netia earmarks the beginning of full speed work dedicated to the creation of a new, stronger Netia Group. A strategic goal for the Company is to become no. 1 online gateway in Poland on the back of a profitable growth.

- Thanks to the combination of a broad scope of existing telco solutions and highly experienced teams from each of the companies, the New Netia will offer its clients a high diversity of products and services marked by top quality of performance and customer care - commented Miroslaw Godlewski, CEO of Netia S.A. - We have already started preparations for the integration process, the execution of which we have planned beforehand in order for the customers to experience only the positive impact of the transformation into the New Netia.

A combined potential of all 3 operators grows Netia Group significantly in scale in terms of the existing customer base and strengthens its market position in all four key customer segments (Home, SoHo & SME, Corpo and Carrier).

New Netia will gain extra potential and new competences for further deployment of multimedia solutions (incl. IPTV) and mobile services (MVNO model). After the acquistions the New Netia renders circa 3 million services to roughly 2 million unique subscribers countrywide. The coverage of New Netia access networks - to much extent already upgraded to render 3play services (high speed broadband, digital TV, fixed telephony) - increased by about 40% to reach 2.2 million homes passed.

Only once the respective transactions are now being closed, it will be possible for Netia to conduct analyses allowing to gauge the ultimate shape of the new ogranisational and functional structure of the New Netia Group. A dedicated integration team has already commenced its work on this project, comprising select Netia officers assisted by the consultants from The Boston Consulting Group, soon to be joined by Dialog and Crowley representatives. The integration process is envisaged to be efficient, objective and transparent in order to maximise the combined potential of the joint organisation with the assistance of highly experienced HR advisers. A detailed integration plan will be announced publicly during Q1/Q2 of 2012.

In total, New Netia generates today revenues in excess of PLN 2.2bn on an annual basis while the consolidated EBITDA pro-forma excluding anticipated synergies is over PLN 550m on annual basis. The estimated synergies should in total reach more than PLN 100m on annual basis in the coming years. The Enterprise Values for Dialog and Crowley, paid in the acquistion transactions by Netia, are approximatelly PLN 890 million and approximatelly PLN 100 million, respectively. Both transactions are financed partially with own funds and partially through debt. On a proforma bais, net indebtedness of New Netia post acquistion transactions amounts to 1.0x net debt to consolidated EBITDA ratio, excluding the contemplated synergies. Guidance for the combined business of New Netia Group for 2012FY will be issued in Q1 2012 following the detailed integration planning process.

About Netia:
Netia S.A. is one of the predominant and the most dynamically growing telecom operator in Poland. Netia provides complex, integrated and user friendly online solutions to its customers.