Investment in international fibre operator

International private equity firm, Cinven, today announces that the Sixth Cinven Fund has agreed to acquire Ufinet International, the international operations of the leading independent fibre network operator, Ufinet Group, for an undisclosed consideration.

Headquartered and managed in Madrid, Spain, Ufinet International provides fibre infrastructure and transmission services to telecom operators across 14 countries including Colombia, Panama, Guatemala and Costa Rica. Its international connectivity network has more than 49,200 kilometres of optical fibre deployed across major cities in the regions in which it operates. Ufinet International employs more than 900 people.

Cinven’s TMT team believes Ufinet International is an attractive investment opportunity for the Sixth Cinven Fund given:

  • Structural market growth: Ufinet International operates in nascent markets with strong growth trajectories, underpinned by increased usage and penetration of fixed and mobile broadband as well as data centres;
  • Internationalisation opportunity: Ufinet International benefits from significant international expansion opportunities, into new countries including Chile, Mexico and Peru, which are already underway;
  • Buy and build opportunity: Ufinet International represents a platform investment from which a significant pipeline of M&A opportunities can be executed, building on the five successful acquisitions it has made in the region over the past three years;
  • Strong financial performance: Ufinet International has delivered consistent double-digit revenue and profit growth in recent years, driven by significant investment into its network, including ‘lit’ services in urban areas; and
  • World class management team: Ufinet International has a highly capable and experienced management team, led by Iñigo García del Cerro, with whom Cinven has worked successfully in the past.

Thomas Railhac, Partner at Cinven, said:

“We know Ufinet International and its management team extremely well as Cinven’s Iberia and TMT teams were instrumental in the roll-out of the international business after Cinven acquired its parent company, Ufinet Group, from Gas Natural Fenosa (‘GNF’) in Spain in June 2014. Ufinet International has demonstrated strong growth both organically and through several value-accretive acquisitions and there remains a substantial market opportunity. Cinven intends to invest further in the international fibre network as well as execute a highly focused buy and build M&A strategy backing the incumbent, first class, management team. We are delighted to partner again with Iñigo and his team on this exciting opportunity. ”

David Barker, Partner at Cinven, added:

“Ufinet International is uniquely positioned internationally, particularly in Latin America, with a ‘first mover advantage’ in the region, and a proven platform for consolidation having completed five acquisitions in the past three years. The fibre market in this region is in its infancy, with demand for fibre continuing to grow as businesses transition to using high speed connectivity. Cinven has significant experience of successfully consolidating telecom assets with investments such as Ziggo in the Netherlands and Numericable in France; and we now see the opportunity to execute a highly attractive market consolidation internationally through Ufinet International.”

Iñigo García del Cerro, CEO of Ufinet International, commented:

“I have had the privilege of working with the Cinven team since its Fifth Fund’s acquisition of Ufinet Group in June 2014 when Cinven bought the business as a non-core asset from GNF. Cinven is now re-investing in its international operations, Ufinet International, through its Sixth Fund in order to invest further in the business and enable us to capitalise on the significant market opportunity ahead.

In the past three years, Ufinet International has scaled its network internationally, in particular in certain Latin American countries, and is now able to leverage its infrastructure to provide new services to its customers and to consolidate and further grow our strong market position.”

The Sixth Cinven Fund’s most recent TMT acquisition is Allegro, a leading online marketplace in Poland, acquired in January 2017. The transaction is not subject to any mandatory conditions (regulatory or otherwise) and is expected to complete in July 2018.

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