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Expansion of ATM S.A. onto Central European markets

In accordance with previous announcements, ATM S.A. and Linx Telecommunications B.V., an Amsterdam-based telecommunications company, signed an agreement under which ATM acquires new-issue shares of the Dutch operator. After completing the transaction, ATM will hold 22% of the Linx company capital.

The transaction value is EUR 16.5 million, paid in cash. ATM is to obtain the cash from the planned issue of shares through the Warsaw Stock Exchange.

For ATM, it is a strategic investment. It will enable the Company to better use its existing competencies and to participate in the aggressive, very effective market strategy of Linx. The transaction also means engagement in creating a regional telecommunications carrier specializing in wholesale data transmission and providing telecommunications services. The cooperation with Linx will enable both partners to combine their competencies in telecommunications and will create opportunities to expand the portfolio of services offered to the customer and to achieve significant revenue synergies. For ATM, the transaction opens an opportunity to offer a complete portfolio of telecommunications services on the fast-growing markets, such as Russia, Ukraine, and the Baltic states.

The ATM Executive Board is committed to achieve that goal. It has also ambitious plans to take in the future more control over the whole undertaking, which is already being successfully executed. Because of that, the signed agreement provides for an option of acquiring a majority interest in Linx Telecommunications within 3 years.

Linx Telecommunications was established in 2003 and is one of the fastest-growing independent telecommunications companies operating in the Central and Eastern European countries. The company provides high-quality wholesale data-transmission services to international and national telecommunications operators, Internet service providers, and corporate customers. It delivers telecommunications services through a network of a total length of 13,300 km, using its own and leased infrastructure. Among other assets, Linx owns a 600-kilometer fiber-optic submarine cable through the Baltic Sea, connecting Stockholm, Helsinki, and Tallinn. The company offers also collocation and hosting services in modern collocation centers in Moscow and Tallinn. It specializes in providing telecommunication links between Russia, Estonia, Lithuania, Latvia, Ukraine, and Poland on the one side and Scandinavia, Western Europe, and the USA on the other side.

ATM S.A. took the decision to make the investment in the perfect moment, when Linx has already had enough time to prove that its strategy is right and is just reaching the profitability threshold to generate positive financial result. Linx has been almost doubling its income every year and according to the current forecasts, it should achieve a yearly income of EUR 20 million and EBITDA of ca. EUR 2 million.

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