Warburg Pincus strikes fourth German deal

The New York-based firm has acquired a majority stake in broadband service provider inexio.

Warburg Pincus has made its fourth investment in Germany with the acquisition of a majority stake in fibre-based internet service provider inexio. The firm will also provide funding for future expansion.

The total enterprise value of the company is about €250 million, with existing shareholder Deutsche Beteiligungs, which first invested in the company in May 2013, participating in the capital increase, according to a statement.

Inexio is expected to benefit from the German government’s goal to connect all households to fast broadband internet by 2018. It currently provides high-speed internet access to 65,000 households in underserved and mainly rural areas. Its existing management team, led by CEO David Zimmer will remain, the statement said.

The transaction is Warburg Pincus’ second in the broadband market and follows its investment in Polish cable operator Inea in 2013.

The investment in inexio is understood to have been made from Warburg Pincus Private Equity XI, a 2012-vintage vehicle that raised $11.2 billion. The firm is also currently investing from its latest vehicle, Fund XII, which closed on $13.4 billion in November.

It follows the hire of René Obermann to the firm’s London office last year. Obermann focuses on global technology, media and telecommunications investments and deals in Germany, according to the firm’s website. Obermann worked at Deutsche Telekom Group from 1998-2013, serving as CEO from November 2006 until 2013. He will serve as chairman at inexio.

Warburg Pincus’ other transactions in Germany include a strategic minority stake in Karlsruhe-based predictive modelling technology company Blue Yonder in 2015; a growth stage investment in 2014 in Munich-based Intellectual Property Associates Network, which outsources trade mark, patent and industrial design services; and a stake in Augsburg-based Kontron, which provides embedded computer systems and which the firm started to build in 2009.