- EQT Infrastructure and OMERS acquire Deutsche Glasfaser, the fastest growing provider of gigabit internet connections through fiber-to-the-home (“FTTH”) to more than 600,000 households and 5,000 businesses across Germany, creating a more sustainable and inclusive society
- Deutsche Glasfaser will be combined with EQT Infrastructure IV portfolio company inexio to form a leading FTTH player in rural Germany. EQT Infrastructure will own 51% in the combined group and OMERS will own 49%
- Over the coming years the combined group is committed to invest over EUR 7 billion into the roll-out of fast-speed internet infrastructure in Germany, thereby significantly contributing to the German government’s plan to provide nation-wide gigabit convergent internet infrastructure by 2025
The EQT Infrastructure IV fund (“EQT” or “EQT Infrastructure”) and OMERS Infrastructure Management Inc. (“OMERS Infrastructure”) (acting on behalf of OMERS, one of Canada’s largest defined benefit pension plans) announced the agreement to jointly acquire Deutsche Glasfaser (the “Company”) from KKR Infrastructure and Reggeborgh.
Since its establishment by Dutch investor Reggeborgh in 2011, Deutsche Glasfaser invested heavily in fiber infrastructure in underserved rural and sub-urban communities in Germany provides high-speed internet access to more than 600,000 households and 5,000 businesses. Deutsche Glasfaser’s scalable network, consisting of more than 30,000 kilometers of fiber-optic infrastructure, together with its best-in-class roll-out machine provides a strong platform for continued growth.
Looking ahead, the management team of Deutsche Glasfaser plans to continue the rapid growth of the Company by pursuing a large-scale deployment of FTTH internet access in rural Germany. FTTH is the fastest, most reliable and future-proof internet connectivity solution available and the only technology that will be able to handle the strongly growing internet bandwidth demands of the future.
Deutsche Glasfaser will be combined with EQT Infrastructure IV portfolio company inexio to form a leading FTTH player in rural Germany as well as one of the leading telco companies in Germany. EQT and OMERS Infrastructure as well as Deutsche Glasfaser’s and inexio’s management teams are convinced that the close collaboration between both companies will accelerate the ramp-up of the FTTH roll-out and create various areas for synergy realization.
Germany is among the countries in Europe with the lowest penetration of FTTH connectivity and will require significant investments over the coming years. Drawing on EQT’s and OMERS Infrastructure’s vast sector experience and strong financial support, the combined group intends to invest over EUR 7 billion over the coming years to further accelerate the fiber roll-out pace in the country’s rural regions. This represents a significant contribution to the German government’s plan to provide a nation-wide gigabit convergent internet infrastructure by 2025.
Uwe Nickl, Chief Executive of Deutsche Glasfaser, said: “We are excited to welcome EQT and OMERS as our new owners and we are fully aligned to further develop Germany’s digital infrastructure. With the industry experience and financial support from EQT and OMERS, Deutsche Glasfaser is well-positioned to take the next step on our growth journey and accelerate the fiber roll-out across Germany. On top, we as a management team are excited to join forces with inexio, which will help us to combine our highly complementary skill-sets and to further accelerate our growth.”
David Zimmer, Chief Executive of inexio, said: “The inexio management team is looking forward to the opportunity of building a leading FTTH provider in Germany with the support of EQT and OMERS, alongside our fellow colleagues at Deutsche Glasfaser.”
Matthias Fackler, Partner at EQT Partners, said: “We have followed Deutsche Glasfaser for some time and are impressed with Uwe Nickl’s and his management team’s commitment to digitizing Germany. EQT has a long history of developing strong fiber companies and looks forward to leveraging this experience, and together with OMERS, contribute to the German government’s plan to deliver nationwide gigabit Internet access by 2025. Deutsche Glasfaser and inexio combined will play a vital role in enabling digital inclusion and sustainable economic growth.”
Marco Pugliese, Managing Director at OMERS Infrastructure, said: “We are pleased to announce our partnership with EQT to accelerate the fiber roll-out in Germany’s rural communities. OMERS is eager to support Deutsche Glasfaser’s and inexio’s ambitious growth plans. This investment follows OMERS recent investment to deploy FTTH to more than 8 million homes in France and meets OMERS Infrastructure’s strong desire to seek exposure to essential digital infrastructure in high quality jurisdictions.”
The closing of the transaction is expected in Q2 2020, subject to customary regulatory approval.
With this transaction, EQT Infrastructure IV is expected to be 70-75% invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication).
EQT is a differentiated global investment organization with more than EUR 62 billion in raised capital and around EUR 41 billion in assets under management across 19 active funds. EQT funds have portfolio companies in Europe, Asia and the US with total sales of more than EUR 21 billion and approximately 127,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.
EQT Infrastructure owns multiple leading providers of Gigabit fiber infrastructure across Europe, including inexio (Germany), Delta Fiber (Netherlands), IP-Only (Sweden) and Global Connect (Denmark/Norway).
About OMERS and OMERS Infrastructure
OMERS Infrastructure manages investments globally in infrastructure on behalf of OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada. Investments are aimed at steady returns to help deliver sustainable, affordable and meaningful pensions to OMERS members.
OMERS diversified portfolio of large-scale infrastructure assets exhibits stability and strong cash flows, in sectors including energy, transportation and government-regulated services. OMERS has employees in Toronto and other major cities across North America, the U.K., Continental Europe, Asia and Australia. OMERS is one of Canada’s largest defined benefit pension funds with net assets of C$97 billion.
About Deutsche Glasfaser
Deutsche Glasfaser is the fastest-growing provider of fiber optic internet connections for retail and business customers in Germany. In the retail customer segment, growth is driven by rising data volumes and the growing use of video streaming, whilst in the business segment, fiber optic connections for small and medium-sized businesses are the key driver of growth. Just over a decade after its establishment, Deutsche Glasfaser is well positioned in rural and small-town communities in Germany, providing internet access to more than 600,000 households and 5,000 businesses.
inexio is a fast-growing provider of broadband connectivity services for retail and business customers in Germany. The Company is well positioned in rural and small-town communities in Southwest and Southern Germany, providing internet access to more than 300,000 households and 6,000 businesses.