FRANKFURT (Reuters) – Swedish infrastructure investor EQT <EQTAB.ST> has bought German fibre optic network operator Inexio, in a deal sources familiar with the transaction said was worth around 1 billion euros ($1.1 billion).
Private equity investor Warburg Pincus and other owners sold their entire stakes in Inexio, which was founded by entrepreneur David Zimmer in 2007 and has connected communities in southern and southwestern Germany, both parties said.
Inexio provides high-speed internet to 110,000 customers and 6,000 businesses, and has a strategic goal of connecting 2 million households by 2030.
EQT partner Matthias Fackler told Reuters his firm’s aim was to turn mid-sized Inexio into a large company, focussing on expanding in its existing region of operations but with the possibility of developing Inexio’s fibre network across Germany.
“The potential is huge in this market,” Fackler said.
Terms were not disclosed, but the sources familiar with its terms said it was valued at around 1 billion euros.
After the transaction, the EQT Infrastructure IV fund will be 50% to 55% invested, the Swedish investor said.
Independent fibre-optic companies have built franchises in German regions and cities, seeking to capitalise on government efforts to build a national network.
The rollout of 5G mobile networks is starting after four operators paid billions for new spectrum at auction. This will also require greater fibre-optic connectivity.
Rival Deutsche Glasfaser, majority-owned by private equity investor KKR <KKR.N>, is also preparing a sale which may start in late 2019 or early 2020, sources familiar with the matter have said.
The Inexio deal is expected to close in the fourth quarter, subject to regulatory approvals.
Clifford Chance acted as legal adviser to EQT, while Evercore, Freshfields Bruckhaus Deringer, Rothschild & Co and EY advised Warburg Pincus.
(Reporting by Douglas Busvine and Paul Carrel; Editing by John Stonestreet and Edmund Blair)