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Pipex Communications (FFG)

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Tuesday 18 October, 2005

Pipex Communications

Acquisition

Pipex Communications PLC
18 October 2005







18 October 2005



                           PIPEX Communications plc

                  Acquisition of Freedom to Surf plc for £10m

                     Builds scale in broadband market place



PIPEX Communications plc ("PIPEX" or the "Company") is pleased to announce the
acquisition of Freedom to Surf plc, the internet service provider, and Freedom
to Surf Consumer Services Ltd (collectively "F2S") for a cash consideration of
£10 million.  The consideration will be met from £2 million of PIPEX's existing
funds and additional facilities of £8 million from the Bank of Scotland and
Lloyds TSB.



F2S is a significant UK ADSL provider, with over 40,000 broadband customers at
the end of September 2005, which, together with PIPEX's existing customer base,
consolidates the Company's position as the 5th largest broadband DSL provider in
the UK.  F2S is profitable and cash generative, achieving unaudited turnover of
£7.2 million for the year ended December 2004 and unaudited pre-exceptional
EBITDA of £414,000.  F2S generated £466,000 in cash in 2004, and has cash
balances of just over £1.2 million.



As previously announced, PIPEX is currently unbundling 60 exchanges. The
acquisition of F2S increases customer density around exchanges already allocated
for unbundling, improving return on capital.  It also provides the opportunity
to unbundle a further 40 exchanges that meet PIPEX's 2 year payback criterion
and will allow PIPEX to offer higher speeds to a greater number of its
customers.



Peter Dubens, Chairman of PIPEX, said:



"In the light of our recent decision to unbundle an initial 60 exchanges, we are
very pleased to add F2S to the PIPEX group, which will further increase the
density of customers around each exchange, thus improving the return on capital
and enabling us to offer higher speeds to a greater number of our customers.
F2S's customers will be able to benefit from our extensive network and the broad
range of services we provide."



                                     -ends-


PIPEX Communications plc                                020 7766 6909
Peter Dubens, Chairman


Financial Dynamics                                      020 7831 3113
Juliet Clarke / Ben Way / Edward Bridges



NOTES TO EDITORS:



About PIPEX

PIPEX is a multiple award-winning provider of integrated telecommunications and
Internet services. With a broad customer base including small/home-offices and
blue chip companies, PIPEX provides a comprehensive range of consumer, business
and corporate voice, broadband, security domain name registration and shared and
dedicated hosting solutions.



PIPEX's focus is simple: enabling businesses and consumers to achieve their
aspirations through proven communications services and emerging technologies.
This is achieved through an extensive portfolio of high-speed Internet
connectivity, managed services and hosting, security and voice products -
combining exceptional performance, innovation and a commitment to customer
service.



Owning one of the UK's most extensive communication networks, PIPEX boasts more
than 100 Points of Presence (PoPs) nationwide, including 20 point-to-multi-point
radio PoPs offering wireless DSL. In addition, five state-of-the-art data
centres, which are manned and monitored 24x7, ensure the security of PIPEX's
customers' business critical applications. Its commitment to investing in its
technology infrastructure ensures that PIPEX continues to deliver the most
scalable, resilient, secure and reliable services.



About Freedom2surf plc.

Freedom2Surf (www.freedom2surf.net) is one of the UK's leading Internet service
providers. The company serves a targeted customer base of Internet
professionals, at home or in business that appreciate the value of advanced
technology, speed and above all reliability in their ISP. Freedom2Surf believes
that Internet privacy and security should be an integral part of the online
experience. Freedom2Surf provides leading support for all the major Internet
components, from ADSL broadband high-speed connectivity, to offering the latest
services from web publishing, email and interactive entertainment to high volume
electronic commerce business architectures. Freedom2Surf was launched in 1997
and is headquartered in St Albans, UK.




                      This information is provided by RNS
            The company news service from the London Stock Exchange