German fiber network builder Deutsche Glasfaser has been acquired in a deal reportedly valued at 2.8 billion ($3 billion) by investment companies EQT and Omers, which have promised to invest more than 7 billion ($7.6 billion) in the rollout of high-speed broadband infrastructure in Germany following their takeover.
EQT, a private equity firm, will take a 51% stake in the business, leaving the rest to Omers, a Canadian pension fund, after the two organizations this week announced a deal with existing owners KKR and Reggeborgh, two other investment companies.
While the official announcement did not specify a fee, the UK's Financial Times newspaper (subscription required) citing sources familiar with the matter says EQT and Omers together paid 2.8 billion ($3.1 billion) for Deutsche Glasfaser, which currently boasts connections to more than 600,000 households and 5,000 businesses.
According to the FT, KKR tried to sell Deutsche Glasfaser last year, when it sought between 3 billion and 4 billion for the company. While 2.8 billion ($3.1 billion) would mark a reduction on that amount, it is substantially more than the valuation of 200 million ($217 million) that KKR reportedly attached to Deutsche Glasfaser back in 2015 according to an FT source when it bought its 70% stake in the firm.
An official statement on the deal published by EQT says Deutsche Glasfaser will be combined with another broadband infrastructure business it owns called inexio, which provides Internet access to more than 300,000 households and 6,000 businesses. It expects the tie-up to result in cost savings and allow it to speed up fiber rollout in the rural parts of Germany it is targeting.
Omers, which is said to manage assets worth about C$97 billion ($73 billion), said its partnership with EQT would help to support ambitious growth plans by Deutsche Glasfaser and inexio.
Deutsche Glasfaser last month struck a deal with Deutsche Telekom, under which the German incumbent will use its Glasfaser's fiber network in the city of Lόdinghausen.
The companies expect the transaction to close in the second quarter of this year.
Iain Morris, International Editor, Light Reading