KKR and Reggeborgh have teamed up to facilitate the expansion of Deutsche Glasfaser (DG), which plans, constructs, and operates fibre-optic networks in Germany and provides German households and companies with fast broadband connections.
KKR will acquire a majority stake in DG, which is currently fully owned by Reggeborgh. In a joint effort, the two partners will provide DG with the long-term capital to embark on an ambitious growth program whereby approximately EUR450m is to be invested in the further roll-out of the German fibre optics infrastructure over the next few years.
Deutsche Glasfaser focuses on the rural and suburban parts of Germany and is active across the entire value chain, from passive to active infrastructure up to acting as an internet service provider. As a fibre-to-the-home (“FTTH”) business, DG has already connected about 100,000 German households and companies to its fibre-optic network, which is the fastest broadband access technology in the world.
Data traffic and internet usage are constantly increasing, favouring high bandwidth provisions such as fibre technology. At the same time, broadband penetration in Germany is still significantly below the European average. With its planned investments, DG will help to connect more people with its high-speed fibre-optic network and thereby also support the German government in its ambition to achieve 100 percent broadband coverage with at least 50 megabit per second by 2018.
Johannes Huth (pictured), Member and Head of KKR Europe, Africa and Middle East, says: "We are excited to partner with Reggeborgh in building a top infrastructure company. With our capital resources and experience, we will bring Deutsche Glasfaser to its next stage of development and thereby also contribute to the ambitious Digital Agenda of the German government.”
Jesús Olmos, Member and Head of European Infrastructure at KKR, says: “Deutsche Glasfaser is a blueprint for the type of investments our infrastructure fund is targeting in Europe: building a partnership with a best-in-class company, and investing significant amounts of capital to grow a business with strong infrastructure characteristics. We are very excited about this new addition to our European portfolio as it opens up opportunities in a new and promising sector – telecom infra – alongside our existing investments in renewables, water, district heating, parking and rolling stock.”
Henry M Holterman, CEO of Reggeborgh, says: “We have ambitious plans to bring the fastest broadband access technology in the world to the German citizens. With its deep capital base and its longstanding country and sector experience, KKR is the right partner to accelerate the realisation of our ambitions.”
KKR has a more than 20-year track record of investing in technology and telecommunications. In Germany, KKR built-up Versatel, the leading German fibre-based fixed line telecom provider which owns the second largest fibre infrastructure in Germany after Deutsche Telekom.
Since 1999, KKR deployed more than $4.7 billion of equity in 15 German companies, working both with trusted German partners such as Siemens, Bosch, Daimler, Linde and Bertelsmann, as well as with innovative entrepreneurs of leading companies such as WILD Flavors and Arago. Currently, 28 of KKR’s global portfolio companies have operations in Germany and employ more than 20,000 people in the country.
