Altamir - 2018 Registration document

1

Business description and activities

Presentation of the Company

www.melita.com

1) Business description Melita is the leading converged fixed-mobile telecoms operator in Malta. It offers broadband, pay-TV, fixed telephony andmobile services to over 120,000 unique customers. Melita also provides B2B telecom and hosting services through its own datacentre. Melita operates a broadband network that passes through 99%of Malta’s households, as well as its ownmobile telephony network. The company has (i) a technological advantage in broadband internet speed vs the incumbent operator GO, which usesmostly DSL, and (ii) a fixed-mobile converged offering (over 75% of customers buymore than one service and some up to 4 services). The company has 403 employees and a distribution network that includes 7 fully-owned shops, 3 exclusive resellers (with 3 outlets) and 1 tele-sales call centre. 2) Investment rationale Melita is the leading converged fixed-mobile telecoms operator, the leader in the pay-TVandbroadbandmarkets and a challenger in the mobile market. It has a technological advantage over competitors, notably a faster internet speed. Melita is one of the leading converged operators in Europe providing fixed-mobile services as well as triple-play (3P) and quadruple play (4P) bundles, for which consumer demand is very high. The Maltese market has robust fundamentals: a good macro outlook, a growing population and a buoyant economy with an increasing demand for B2B telecom and hosting services. There is a clear path to revenue growth, driven by (i) competitive mobile/4P offers, (ii) demand for higher internet speeds, and (iii) the development of B2B activities. Meanwhile, improvements in operational efficiency are expected to lead to margin uplift. Apax Partners SAS invested in Melita with a quality partner, Fortino, which is headed by former executives of Telenet. Fortino co-invested and helped to bring in operating advisors to work with the management team on various projects.

3) Sources of value creation The investment thesis is to: (i) continue to invest in network infrastructure to maintain the company’s broadband leadership by delivering better internet service to customers and regain television market share by improving the content and customer experience; (ii) develop mobile market share through bundling with fixed services; (iii) unlock B2B market potential; and (iv) improve customer care and operational efficiency. 4) Achievements A new Chairman & CEO with extensive experience in telecommunications was recruited in April 2016. Previously, he servedasBoardmember andCEOof BlizooMediaandBroadband (the largest operator inBulgaria), as CEOof theGerman operator Kabel BW and as CEO of HanseNet. The new chief executive has implemented a number of measures, among which initiatives to improve brand perception and customer service. In 2018, Melita finalised the nationwide deployment of DOCSIS 3.1 on its Fixed network and 4.5G on its mobile network to increase its technological and performance edge. The company recently introduced its new quadruple-play offer (Flexi) featuring: i) the highest 1 Gigabit internet speed in the country, ii) the best existing Wifi technology (Plume mesh Wifi), and iii) exclusive TV football rights acquired in early 2018. 5) Performance Melita maintained its growth momentum in 2018 by growing its revenues and EBITDA by 10% and 14%, respectively, over the period, increasing its subscriber base while reducing churn. 6) Exit With its subscription-based business model, strong growth, excellent operational performance, andhigh cash flowconversion, Melita should be highly attractive to both financial and trade buyers.

DATE OF INVESTMENT

PORTFOLIO AT FAIR VALUE

SECTOR

COUNTRY

RESIDUAL COST

FAIR VALUE

2016

33.7 m

71.1 m

7.1 %

€

€

M A LTA

28 Registration document ALTAMIR 2018

www.altamir.fr