EQT, OMERS to pay 133x for Deutsche Glasfaser

10 February 2020 - 12:00 am UTC

EQT Infrastructure has agreed to buy German rural fibre company Deutsche Glasfaser together with OMERS Infrastructure in a deal valuing the group at about EUR 2.8bn, as part of an EUR 7bn plan to build a rural broadband champion.

The investors agreed to buy Deutsche Glasfaser, which owns 600,000 fibre-to-the-home (FTTH) and 5,000 business connections across Germany, from KKR Infrastructure and Dutch private equity firm Reggeborgh, according to a joint statement on Monday (10 February).

The deal will give Deutsche Glasfaser an enterprise value of about EUR 2.8bn, said three sources close to the deal.

The valuation represents a multiple of 133 times the business’ 2019 EBITDA of EUR 21m, according to one of the sources.

It will still be about 70 times the EUR 40m EBITDA that Deutsche Glasfaser’s management expects in its business plan for 2020.

The high figure reflects the fact that the price is largely based on the growth assumptions for the business, rather than its current revenues and earnings, said sources.

The multiple will be about 28 times Deutsche Glasfaser’s roughly EUR 100m adjusted annual EBITDA, considering the cash generated by the current network and without taking into account the large expenses for its future expansion, according to another source close.

Deutsche Glasfaser has grown at breakneck speed over the past few years, adding about 150,000 connections each year in 2018 and 2019, according to Deutsche Glasfaser’s annual reports. The network is now twice as large as it was in 2017.

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