An affiliate of private equity firm Warburg Pincus is to acquire a majority stake in and provide funding for the future growth and development of inexio, a provider of fibre-based internet access services in Germany.
The total enterprise value of the transaction is approximately EUR250 million. Deutsche Beteiligungs AG (DBAG), an investor in inexio since 2013, is also participating in this capital increase.
inexio is a fast-growing service provider in the German telecommunication services market, providing fibre-based assess services to business and residential customers. The Company benefits from the growing demand for high speed access driven by increasing video consumption in the consumer segment as well as strong demand for fibre connectivity for SME customers and cellphone towers. Supported by these trends, inexio has grown at an annual revenue growth rate of 34 per cent from 2011-2015. Going forward, inexio is poised for continued strong growth, supporting the Federal Government in pursuit of its target to connect all German households with fast broadband of at least 50 Mbit/s by 2018. The successful and proven management team of inexio, led by Chief Executive Officer and founder David Zimmer, will stay on-board and lead the next phase in inexio’s development.
Zimmer says: “We see a tremendous growth opportunity for inexio. The demand for fast next generation internet access in Germany is large and rapidly growing as a result of the explosion in data consumption. With the support of Warburg Pincus, inexio will further accelerate its growth and invest in the roll-out of our network, providing high speed internet access that businesses and consumers across Germany can rely on. We also believe that with close to 150 access providers in Germany today, there is a compelling opportunity for us to take a lead in consolidating the industry.”
René Obermann, Managing Director at Warburg Pincus, says: “We love to work with great entrepreneurs and are delighted to be backing David Zimmer and his management team, who have built inexio from scratch to one of the fastest growing communication service providers in Germany today. Across Germany and Europe, there is an urgent need for capital to fund the development of ubiquitous digital highways. Together, inexio and Warburg Pincus will play an important role in bringing this essential infrastructure to every citizen. Our common vision is to make inexio a leading provider of innovative high speed networks in Germany. To achieve this goal, we are prepared to fund an ambitious growth and consolidation plan in the coming years.”
Torsten Grede, Spokesman of the Management-Board at DBAG, says: “We are committed to further supporting the growth strategy of inexio’s outstanding management team. Since our first investment in May 2013, inexio has grown tremendously both organically as well as through market consolidation. We see inexio as a showcase for private equity – to support ambitious management teams and develop promising business models further. Warburg Pincus and René Obermann will enable inexio to take another leap forward and we look forward to working with them.”
Under the terms of the agreement, Warburg Pincus will appoint two members of the Supervisory Board of inexio and René Obermann will become Chairman.
Closing of the transaction is subject to a number of customary conditions and approvals.