CANCOM: EUR 225 million book gain from divestment of business activities in the UK and Ireland

- Transaction values CANCOM Ltd. at an Enterprise Value of close to EUR 400 million, corresponding to a transaction multiple of 15.8x.

- Transaction will lead to a book gain of EUR 225 million to be recognized in the third quarter in CANCOM Group's net profit for 2021.

- Proceeds to be reinvested predominantly in acquisitions with a focus on Germany, Austria and Switzerland.

- As a result of the sale, results of CANCOM Ltd. for the financial years 2020 and 2021 will be reclassified as discontinued operations. Executive Board confirms published forecast for 2021 on the basis of adjusted comparative financials for the previous year.

Munich, Germany, 28 July 2021 - The Executive Board of CANCOM SE today signed a definitive agreement regarding the sale of the subsidiary CANCOM Ltd to Telefónica TECH. The transaction follows a strategic review announced on 25 May 2021. As a result, CANCOM is divesting its entire business activities in the United Kingdom and Ireland. The transaction values CANCOM Ltd. at an Enterprise Value of close to EUR 400 million, which corresponds to a transaction multiple of 15.8x (Enterprise Value/EBITDA 2020A). For comparison, the shares of CANCOM SE are currently trading at an Enterprise Value/EBITDA multiple of around 12.6x (Enterprise Value/EBITDA 2021E, based on broker consensus). On the sale and deconsolidation of CANCOM Ltd., CANCOM will realize a book gain of around EUR 225 million, which will be included in CANCOM Group's net profit for 2021.

"The companies which today form CANCOM Ltd. have been acquired in 2018 and 2019. The exit proves our ability to execute value enhancing transactions. Achieving a sizeable multiple premium to our own trading multiple and the high book profit show that enormous value has been created for our shareholders in a short time. Now our full attention is on the great growth opportunities we have in the DACH region," said Rudolf Hotter, CEO of CANCOM SE.

Upon completion of the transaction CANCOM SE will receive cash proceeds of around EUR 390 million in the financial year 2021. The Executive Board of CANCOM SE expects the transaction to be completed within the third quarter of this year. CANCOM intends to reinvest the proceeds predominantly in the acquisition of companies in its core regions Germany, Austria and Switzerland.

Forecast for the year 2021 unchanged

As a result of the transaction, CANCOM Ltd. will be reclassified as discontinued operations in CANCOM Group's financial reporting. Accordingly, the earnings figures are adjusted for the earnings contributions of CANCOM Ltd. for the current year and the financial year 2020. Based on the new adjusted comparative figures for 2020, the Executive Board of CANCOM SE confirms the forecast for CANCOM Group published in the 2020 annual report. According to this forecast, CANCOM Group is expected to grow revenue, gross profit and EBITDA significantly and EBITA very significantly in 2021. The forecast for the Group's segments also remains unchanged.

"The sale does not change our targets for operational business development outside the UK and Ireland. We therefore confirm the forecast for 2021. However, the sale naturally has a very positive impact on our EBIT and earnings per share, given the impact of the purchase price allocation is no longer affecting EBIT and net income. In addition, the increase in value now realised with the disposal contributes directly to the earnings per share," said Hotter.

Investment bank ParkView Partners is acting as exclusive financial advisor and law firm Heuking Kühn Lüer Wojtek is acting a legal counsel to CANCOM SE.

The Executive Board of CANCOM SE plans to hold capital market days in Paris, London and Frankfurt in October 2021, subject to the current pandemic situation at that time.

About CANCOM
As a Digital Transformation Partner, CANCOM accompanies organizations into the digital future. CANCOM supports customers to simplify complex enterprise IT and increase their business success through the implementation of modern technology. In order to comprehensively meet the IT needs of companies, organizations, and the public sector, CANCOM delivers tailor-made IT end to end from a single source.

The CANCOM Group's range of IT solutions includes consulting, implementation, services, and the management of IT systems. Customers benefit from the extensive expertise as well as a holistic and innovative portfolio that covers the IT requirements that are necessary for a successful digital transformation. As a hybrid IT integrator and service provider, the Company provides an integrated range of services and solutions including business solutions and managed services, such as cloud computing, analytics, enterprise mobility, IT security, hosting, and as-a-service offerings.

With more than 4,000 employees worldwide, the internationally active CANCOM Group and its efficient partner network ensure market presence and customer proximity in Germany, Austria, Switzerland, Belgium and the USA. The CANCOM Group is led by Rudolf Hotter (CEO) and Thomas Stark (CFO). The company is headquartered in Munich. CANCOM has an annual revenue of around EUR 1.3 billion and its parent company, CANCOM SE, is listed in the MDAX and TecDAX of the Frankfurt Stock Exchange (ISIN DE0005419105).

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Sebastian Bucher
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