ATN Aterian Plc

RNS Number:9912H
Affinity Internet Hldgs PLC
3 August 2001


AFFINITY ACQUIRES ATLANTIC TELECOM'S UK INDIRECT RESIDENTIAL CUSTOMER BASE AND
PLACING OF 1.5 MILLION NEW ORDINARY SHARES AT 120P PER SHARE

London, 3rd August 2001 - Affinity Internet Holdings plc ("Affinity" or the
"Company") announces that its subsidiary, Affinity Wireless Ltd, has agreed to
acquire the assets of the UK indirect residential telecommunications customer
base of Atlantic Telecommunications Ltd ("Atlantic"), a wholly owned
subsidiary of Atlantic Telecom Group plc, for a cash consideration of #1.8
million. Under the terms of the agreement, 25 per cent. of the total
consideration (#450,000) is payable immediately, with completion expected to
take place on the 8th August with the payment of the outstanding balance.

The Acquisition will increase Affinity's fixed line subscriber base by
approximately 124,000 active residential customers, opening up further
opportunities to cross-sell other Group services. The newly acquired customers
will receive an enhanced range of services including mobile phone and Internet
access packages from Affinity.

As part of the deal, Affinity's joint venture Hurricaneseye will enter into a
reseller agreement with Atlantic and will be taking over billing
responsibilities for the acquired base.

The customer base being acquired currently generates #18 million per annum in
revenues, with gross margins between 20 per cent. and 25 per cent. The
directors of Affinity believe that the business being acquired is capable of
generating EBIT in excess of #1 million per annum.

Due to the Company's existing customer services and call centre
infrastructure, there will no be no movement of employees to Affinity from
Atlantic, and the directors of Affinity do not foresee the need for any
significant investment in the short term.

Affinity has purchased the business as a going concern. In addition to the
customer base, Affinity will take ownership of assets valued at #1.2 million
including the 1XXX indirect access numbers, and the hardware and applications
software needed to allow Affinity to properly operate the business.

In addition, Affinity today announces the placing of 1.5 million new ordinary
shares in the Company ("Ordinary Shares") ("the Placing Shares") at a price of
120p per share ("the Placing Price"), raising approximately #1.73 million (net
of expenses). The Placing Shares have been placed with institutional investors
and the net proceeds will be applied to part fund the Acquisition. The Placing
Price represents a discount of approximately 9.4 per cent. to yesterday's
closing middle-market price of an Ordinary Share of 132.5p.

Application will be made to the UK Listing Authority for admission of the
Placing Shares to the Official List and for admission to trading to the London
Stock Exchange ("Admission"). Admission of the Placing Shares is expected to
occur on 9 August 2001, following completion of the Acquisition.

Commenting on the announcement, Wayne Lochner, Group CEO of Affinity said:

"Affinity remains committed to achieving its aim of driving profitable
revenues through the business in 2001 and thereby maximising shareholder
value. The Board are excited by the acquisition as it goes to the core of our
strategy. The acquisition will allow Affinity to continue its strong growth at
the heart of the converging internet, telecom, content and commerce markets."

ENDS

Enquiries:
Affinity Internet Holdings
Nikki Redfern                        Tel: 020 7670 1155

                                     Email: nikki@affinity.uk.com
Merlin Financial Communications
David Simonson                       Tel: 020 7606 1244

                                     Email: dsimonson@merlinfinancial.com

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