US oil and gas investor takes control of euNetworks and commits $500m

A US private equity firm is to take a majority interest in euNetworks and plans to spend $500m on development.

London-based euNetworks will use the money to develop its network footprint, said the carrier’s CEO, Brady Rafuse. The investment, from Stonepeak Infrastructure Partners, will be used for both organic and inorganic development, said a statement from the companies.

“This agreement offers Stonepeak the platform to enter the bandwidth market, and it provides euNetworks with a fantastic opportunity to accelerate growth and deliver more for our customers,” said Rafuse, who remains CEO.

Neither company is saying what percentage Stonepeak will own of euNetworks. “We can’t disclose that,” Hannah Fox, senior director of marketing, told Capacity, adding that the information may become available when the deal is closed – expected “in the coming months”, according to the euNetworks statement.

It appears to be Stonepeak’s first investment outside North America, where its list of interests – representing $11.3 billion worth of investments – mainly includes companies that are in oil and gas. One of the few telecoms shareholdings are Denver-based data centre company Cologix, in which it acquired a majority stake in February 2017, also for $500 million.

In 2014 Stonepeak invested in wireless infrastructure company Digital Bridge, and the following year Stonepeak and Digital Bridge together led a $1.4 billion recapitalisation of carrier-neutral wireless networking company ExteNet Systems.

euNetworks owns and operates dense fibre-based metropolitan networks in 14 cities, connected by an intercity backbone covering 49 cities in 15 countries, stretching from Dublin to Marseille to Helsinki.

These networks directly connect into over 300 data centres and more than 1,300 further cell towers, cable landing stations and enterprise buildings. The company said that “for Stonepeak the investment represents an ideal platform to enter the bandwidth infrastructure market”.

Rafuse, a former BT and Level 3 executive who has been with euNetworks since 2009, added: “We have demonstrated our ability to remain focused on what we do well, while investing in and developing our network footprint. But we’ve seen the nature of the opportunity continue to grow exponentially and see Stonepeak as the right partner for the next phase of our growth. We are genuinely excited at what this transaction and partnership offers our customers, our people and our existing investors.”

The existing euNetworks investors, including Columbia Capital and Greenspring Associates, will continue to hold “a material interest in the company’s new capital structure”, said the company. “We’ve been an investor in euNetworks since 2009 and we’re delighted to be staying with the company on its continuing journey,” said John Siegel, partner at Columbia Capital, which has $3 billion of funds under management.

Trent Vichie, co-founder and co-CEO of Stonepeak, said: “euNetworks has done an exceptional job delivering critical bandwidth infrastructure to its customers in a market characterised by rapid growth in data traffic and increasingly complex connectivity requirements. We are delighted to partner with Brady and the euNetworks team in their next phase of growth.”

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