New York-based private equity firm Warburg Pincus has acquired a strategic minority stake in Polish cableco Inea and committed to providing additional funding for growth and consolidation.
Announcing the news today, Inea – Poland’s fourth-largest…
New York-based private equity firm Warburg Pincus has acquired a strategic minority stake in Polish cableco Inea and committed to providing additional funding for growth and consolidation.
Announcing the news today, Inea – Poland’s fourth-largest cableco – said the funding will be used to support in-sector consolidation as well as a major expansion of its Next Generation Access (NGA) network.
The parties have not disclosed the financial details of the investment, although Inea said it believes it marks the largest private equity investment in Poland this year.
A spokesperson for Warburg – which, together with co-investor Cinven, formed the Netherland’s largest cableco Ziggo by merging three smaller players between 2005 and 2007 – noted that the firm is a “significant” minority investor.
In its statement, Poznan-based Inea, which states it is the largest cableco in Western Poland’s Wielkopolska region, said Warburg’s investment will help it “to consolidate the highly-fragmented local cable market”.
Inea said the fibre-to-the-home technology rollout will enable it to extend broadband access to an extra 200,000 households and a “significant number of businesses”. The triple-play operator says its network currently passes 360,000 homes and serves 170,000 subscribers.
Part of Warburg’s investment is set to fund Wielkopolska Siec Szerokopasmowa – a project with the local government to roll out more than 4,000km of fibre optic backbone and distribution network.
Inea co-founder and president of the management board Janusz Kosinski explained the company has been on the lookout for a partner to help it complete its NGA project on as large a scale as possible.
“Warburg Pincus is a very experienced and successful investor who fully supports the project to construct the [NGA] network … which will lead to all inhabitants throughout the Wielkopolska region benefitting from access to next generation broadband telecommunication services,” he said.
Warburg Pincus director Paul Best said: “The Polish TV and broadband markets benefit from long-term structural growth and cable has a significant advantage over other technologies. We were attracted to Inea due to its strong market position and the potential for further growth and industry consolidation.”
Best said the firm is looking forward to supporting the Inea management team as “active partners with a long-term value-creation agenda”.
Warburg has gradually reduced its stake in Ziggo since the cableco completed its IPO in March 2012. This March, the firm reduced its stake from 37.1% to 17.1% via an accelerated bookbuild. UK-based Barclays, which underwrote the transaction, was left with a 14.2% stake after it failed to generate enough interest from investors but went on to sell a 12.65% stake to US-based cable giant Liberty Global.
