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(Adds valuation, EQT quote)
By Arno Schuetze
FRANKFURT, Feb 10 (Reuters) - Investors EQT and
OMERS have agreed to buy German fibre-optic network company
Deutsche Glasfaser from buyout firm KKR, increasing
pressure on incumbents Deutsche Telekom and Vodafone
to roll out high-speed internet access more widely.
EQT Infrastructure last year acquired peer Inexio and is now
planning to merge that company with Deutsche Glasfaser. EQT will
hold 51% in the combined group and OMERS Infrastructure 49%, the
two investors said on Monday.
The deal, in which EQT beat rival investment firms Antin and
Brookfield, values Deutsche Glasfaser at more than 2.5 billion
euros ($2.74 billion), including debt, people close to the
matter said.
Over the coming years the combined group plans to invest
more than 7 billion in the roll-out of high-speed internet
infrastructure in rural Germany.
Deutsche Glasfaser, set up by Dutch investor Reggeborgh in
2011 and previously backed by KKR, has a broad national focus
and has invested around 1 billion euros in its network since
2011.
It provides high-speed internet access to more than 600,000
households and 5,000 businesses through 30,000 kilometers of
fiber-optic infrastructure.
"Deutsche Glasfaser and Inexio currently connect a combined
250,000 homes a year to fibre-optic grids and we are planning to
double that in the medium term", EQT partner Matthias Fackler
said.
Independent fibre-optic companies have built franchises in
German regions and cities, seeking to capitalise on government
efforts to build a national network and achieve 'gigabit'
speeds.
Both Inexio and Deutsche Glasfaser were put up for sale last
summer and suitors had contemplated a combination of both from
the beginning.
Deutsche Glasfaser has annual earnings before interest, tax,
depreciation and amortisation of more than 100 million euros,
according to a person familiar with the matter.
The rollout of 5G mobile involves erecting cells connected
by fibre-optic to main mobile masts - enabling rapid downloads
and shortening reaction times so that, for example, self-driving
cars can navigate city streets safely.
At around 7% of households, fibre-optic penetration is lower
in Germany than in countries like the Netherlands, creating
pressure on Europe's largest exporter to speed up its rollout to
remain competitive.
Innexio and Deutsche Glasfaser have been building
fibre-to-the-home connections in underserved parts of Germany,
creating de facto local monopolies.
OMERS has also invested in French fiber-to-the-home (FTTH)
firm SFR FttH, which last year bought peer Covage.
($1 = 0.9134 euros)
(Additional reporting by Douglas Busvine, editing by Riham
Alkousaa, Kirsten Donovan)
