KKR sells stake in German network provider to EQT and OMERS

Global investment firm KKR has inked a deal with firm EQT and the Ontario Municipal Employees Retirement System (OMERS) for the sale of its ownership of Deutsche Glasfaser, an internet infrastructure provider in Germany.

The deal is expected to close in the second quarter. OMERS Infrastructure Management Inc and the EQT Infrastructure IV fund is where the new investment will be housed.

OMERS, which is one of the largest pension plans in Canada, has net assets of C$97 billion. The fund has roughly C$18 billion invested in infrastructure.

“We are pleased to announce our partnership with EQT to accelerate the fiber roll-out in Germany’s rural communities,” said Marco Pugliese, managing director at OMERS Infrastructure. “This investment follows OMERS recent investment to deploy FTTH to more than 8 million homes in France and meets OMERS Infrastructure’s strong desire to seek exposure to essential digital infrastructure in high quality jurisdictions.”

EQT, meanwhile, had nearly $10 billion in assets raised for its infrastructure fund.

“We have followed Deutsche Glasfaser for some time and are impressed with Uwe Nickl’s and his management team’s commitment to digitizing Germany,” said Matthias Fackler Partner at EQT Partners. “EQT has a long history of developing strong fiber companies and looks forward to leveraging this experience, and together with OMERS, contribute to the German government’s plan to deliver nationwide gigabit Internet access by 2025.”

KKR’s operational and financial support enabled Deutsche Glasfaser to invest more than €1.2 billion in fiber infrastructure and deployment in underserved rural and suburban communities in Germany, increasing connections to more than 600,000 households and 5,000 businesses, according to KKR, which took a majority position in the company in 2015 with a purchase from Dutch investor Reggeborgh.

“A big thank you Uwe Nickl, Jordi Niewenhuis and their management team for an incredible journey over the past years,” said Vincent Policard, partner at KKR in European infrastructure. “We are delighted to have contributed to this by supporting the growth of a company which has transformed German connectivity, making huge progress in ensuring that all German households and businesses have access to the digital infrastructure necessary to drive economic growth and help societal development.”

The investment in Deutsche Glasfaser was made through KKR’s Infrastructure Fund II. KKR has been active in the infrastructure sector for a decade and currently has around $20 billion in AUM. The global infrastructure platform has completed over 30 investments in that period, half of those in Europe, across the energy and utility, transportation and telecommunications sectors.

The team is currently investing KKR Global Infrastructure Investors III, a $7.4 billion vehicle raised in 2018, and has been active in Europe in recent months with transactions including the acquisition of a majority stake in Hyperoptic, a leading UK fiber broadband provider.

According to OMERS, the management team of Deutsche Glasfaser plans to continue the rapid growth of the Company by pursuing a large-scale deployment of FTTH internet access in rural Germany. FTTH is the fastest, most reliable and future-proof internet connectivity solution available and the only technology that will be able to handle the strongly growing internet bandwidth demands of the future.

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