Permira has sold portfolio company Debitel to German telecom giant Freenet for €1.63 billion ($2.55 billion) in a move that will create Germany's third-largest mobile phone company.
As a condition of the deal, Permira will receive a 24.99 percent stake in Freenet, or roughly 32 million shares, according to a statement from Freenet. Permira will also be issued a long-term €132.5 million interest-bearing loan note from the combined entity.
In 2004, Permira purchased a 95 percent stake in Dusseldorf-based Debitel from Swiss telecom company Swisscom for €640 million. Three years later, Permira oversaw Debitel's €560 million acquisition of Danish mobile services provider Talkline.
Permira declined to comment. It is unclear what return Permira realised on the acquisition.
Freenet's acquisition came amid significant opposition from its shareholders, which include German internet giant United Internet. In an effort to thwart the deal, United Internet attempted to purchase Freenet for 16 euros per share after initially offering 12.80 euros per share, according to a report by Reuters.
If German antitrust regulators approve the deal, the merger will result in the third largest mobile phone operator in Germany, trailing only Vodafone and T-Mobile in subscribers.
Permira has been one of Europe's most active private equity groups in the telecom sector, acquiring UK satelltie company Inmarsat in 2003 and Swedish mobile phone software developer Across Wireless in 1999.