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Market Mergers and Acquisitions News

P4 with access to its own fibre-optic network and data center clusterr

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The P4 company signed a preliminary agreement for the purchase of all shares of 3S – a Katowice-based fibre-optic network operator and a data center cluster.

P4 alliance with the 3S Group

P4 company in a stock exchange announcement informed that on 25 June 2019 it concluded a preliminary agreement on the purchase of all shares in 3S SA with its registered office in Katowice. Apart from the parent company, the planned transaction will also include an indirect acquisition of all shares in all 3S subsidiaries – 3S Data Center, 3S Fibertech and 3S BOX. The parties selling the Group’s shares 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) of 3S.

The total value of the 3S Group is € 96m, i.e. approximately PLN 410m, and the value of equity is € 78m (PLN 333m). The acquisition will be financed from own funds and on the basis of external financing available to P4. The finalisation of sales depends on obtaining appropriate regulatory approvals. P4 assumes that the transaction will be successfully closed in the third quarter of this year. P4 is currently one of the largest 3S customers from which it leases lines to its mobile network location.

3S fibre-optic support for the development of communication 5G

P4, taking over 3S, wants primarily to support the implementation of the company’s strategy focused on mobile technology, assuming the development of an effective wireless network with high bandwidth. The issue becomes particularly important in the light of the planned implementation of the 5G standard. The 3S optical fibre network, which to a large extent overlaps with the Play base station network, is to support the future growth of data transmission in the fifth generation technology (high throughput, low latency, appropriate level of provided services). The planned long-term transaction will also ensure cost control of transmission services to base stations and Play collocation through its own optical fibre network and data centre infrastructure. The purchase of 3S shares is also beneficial, taking into account the time of implementation and the level of capital expenditures in comparison to the scenario of building one’s own fibre-optic network from scratch.

P4: own data centre cluster and stronger offer for business customers

P4, taking over the 3S datacentre activity, also announces the development of the offer for business in the scope of data centre and fibre-optic services. 3S through its subsidiary 3S Data Center is the owner of the 3S Data Center cluster, which consists of three facilities in Katowice and one in each of Krakow, Warsaw and the finalised investment in Bytom (the facility is equipped with equipment and some equipment is still in the process of selection or purchase). The total area of the facilities is approx. 4,700 m², and the net area of IT chambers is 2,600 m².

3S: experience built up since 2002

The 3S Group has been active in the telecommunications sector since 2002. It has built its own fibre-optic network with a length of about 3,800 km and a data centre cluster. It provides comprehensive telecommunications services, collocation and cloud services for business customers. The 3S Group comprises: 3S, 3S Data Center, 3S Fibertech and 3S BOX. 3S company builds and provides fibre-optic infrastructure and telecommunication services. 3S Data Center provides IT services based on its own data centres in Warsaw, Katowice, Cracow and Bytom, while 3S Fibertech is an operator of a fibre-optic network serving several hundred business customers. The 3S Group employs approx. 250 people.

According to the P4 announcement in the stock exchange communique, in 2018 the 3S Group generated PLN 88m of consolidated revenues and PLN 32m of EBITDA. In turn, according to the 3S financial statements, the revenues of the entire group in 2018 amounted to PLN 103m. In a presentation prepared for shareholders and analysts devoted to the planned transaction, P4 also stated that approximately 70% of the 3S Group comes from telecommunications services and the rest from data centre services. Telecommunications revenues in 2016-2018 grew on average annually by 10% and from data centres by 32%.

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