EQT Infrastructure acquires IP-Only for $1.93bn

13 June 2019 | Jason McGee-Abe

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EQT Partners has sold Swedish fibre infrastructure provider IP-Only from its mid-market funds to its infrastructure fund at an enterprise value of SEK 18.25 billion ($1.93bn).

The private equity group’s Infrastructure IV fund has acquired IP-Only from EQT’s mid-market and mid-market Europe funds at a time when the alternative owner and operator of high capacity fibre infrastructure is helping the Swedish Government to reach its 2025 broadband targets.

It’s been a busy period of late for EQT, which ended discussions to buy Australia’s Vocus Group for $2.3 billion, bought Maltese telco Melita, and agreed to buy fibre network owner Zayo Group Holdings for $14.3 billion including debt alongside Marc Ganzi’s Digital Colony.

"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, CEO of IP-Only (pictured).

“IP-Only has taken a leading role to contribute to the Swedish Government's broadband targets, meaning that 98% of the Swedish population will have broadband access by the end of 2025. We remain committed to execute on this mission and we now 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."

EQT Mid-Market acquired IP-Only in 2013 when the company was a wholesale-and-enterprise-focused data communications supplier. Today, IP-Only is a leading provider of mission critical fibre infrastructure, serving both the B2B and B2C segments with a high-capacity, nationwide network and connectivity to the other Nordic countries.

Johan Dettel, partner at EQT Partners and investment advisor to EQT Mid-Market, said: "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. 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."

Today, IP-Only is the second largest fibre infrastructure provider in the Swedish FTTH market and the operator with most focus on the rural parts of Sweden. It owns and operates approximately 16,000km of fibre network that, together with leased infrastructure, covers 230 of 290 municipalities in Sweden. The company, through its consumer division, started a nationwide rollout of fibre to residential customers in 2014 and today it provides wholesale fibre access services to more than 200,000 households.

IP-Only’s enterprise segment provides connectivity and data communication services to more than 3,000 corporate and public sector customers. The product offering focuses on the infrastructure layer of the communication stack and includes internet, WAN and dedicated capacity services. IP-Only is also one of the largest providers of colocation data centre services in Sweden.

Masoud Homayoun, partner at EQT Partners and investment advisor to EQT Infrastructure IV, said: “EQT Infrastructure has a solid track record from developing strong fibre assets in the Nordics as well as globally, and we are impressed by the growth IP-Only has achieved over the previous years. IP-Only has developed into an infrastructure business with an excellent position in the market and it will continue to support digitisation of households and businesses in the years ahead.”

The transaction, which included an earn-out of up to SEK 1 billion ($105.5m), was signed following a competitive auction process with both industry and financial buyers.

It is expected to close in June 2019.