EQT sells IP-Only for €1.7bn

August 2019 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2019 Issue

In a transaction with an enterprise value of $1.7bn, Swedish private equity (PE) group EQT’s Mid Market fund has sold high-growth fibre infrastructure provider IP-Only to EQT Infrastructure – the EQT arm tasked with identifying investment opportunities in medium-sized infrastructure businesses.

Since it was acquired by EQT Mid Market – which includes the EQT Mid Market Europe fund – in 2013, IP-Only has accelerated the transformation of the communication infrastructure landscape in Sweden, and increased the fibre deployment pace to support the Swedish government’s 2025 broadband targets.

Furthermore, IP-Only has installed fibre connections to more than 200,000 households across Sweden, tripled the employee base and increased revenues and earnings before interest, tax, depreciation and amortisation (EBITDA).

In addition, during the period of EQT Mid Market’s ownership, IP-Only invested €845m to expand its network and execute an ambitious consolidation strategy, including 15 private add-on acquisitions and two buyouts from Stockholm Stock Exchange. In 2014, IP-Only launched a fibre-to-the-home (FTTH) offering to meet the increasing demand for high-speed internet for households in Sweden.

Since then, IP-Only has played an important role in building the digital infrastructure for a connected society able to reach Sweden’s sustainable development goals. Today, IP-Only is the second largest fibre infrastructure provider in the Swedish FTTH market and the operator with most focus on the country’s rural areas.

“Together with EQT Mid Market, IP-Only has transformed from a local enterprise data communications provider, to a pan-Nordic, B2B and B2C provider of mission critical fibre infrastructure,” said Frida Westerberg, chief executive of IP-Only. “We have taken a leading role in contributing to the Swedish government’s broadband targets, meaning that 98 percent of the Swedish population will have broadband access by the end of 2025.”

A leading investment firm with more than €61bn in raised capital across 29 funds and around €40bn in assets under management (AUM), EQT funds have portfolio companies in Europe, Asia and the US with total sales of more than €21bn and approximately 127,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.

“EQT Mid Market is proud of IP-Only’s development journey over the past six years, as they have transformed the fixed telecom infrastructure landscape in Sweden,” said Johan Dettel, a partner at EQT Partners and investment adviser to EQT Mid Market. “We are impressed with what has been achieved under the leadership of Frida Westerberg and her team and IP-Only is now well-positioned to take the development to the next level.

“IP-Only plays a critical role in the digitalisation of Sweden, also including its more rural parts, which is a prerequisite to enable digital inclusion, social progress and sustainable economic growth,” he continues. “The company is impactful and defines what PE is all about by combining investments and risks with significant contribution to the development of society.”

Acting as financial advisers for EQT Mid Market are J.P. Morgan and SEB, with White & Case as legal adviser.

Ms Westerberg concluded: “We remain committed to execute on our mission and look forward to continuing our growth journey with EQT Infrastructure, leveraging on its deep industry knowledge and solid track-record from developing strong fibre assets.”

Fraser Tennant