The EQT Infrastructure IV fund (EQT) and OMERS Infrastructure Management (OMERS) are to jointly acquire Deutsche Glasfaser from KKR Infrastructure and Reggeborgh.Since its establishment by Dutch investor Reggeborgh in 2011, Deutsche Glasfaser invested heavily in fibre infrastructure in underserved rural and sub-urban communities in Germany and today 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 kilometres of fibre-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 realisation.
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, says: “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 fibre 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, says: “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 digitising Germany. EQT has a long history of developing strong fibre companies and looks forward to levering 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, says: “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 per cent invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication).
