Cinven to invest in Ufinet International

International private equity firm Cinven today announces that the Seventh Cinven Fund has agreed to make a majority investment in Ufinet International (‘Ufinet’ or ‘the Group’), a leading fibre network operator headquartered in Spain and operating in Latin America, for an enterprise value of approximately €2.5 billion.

The transaction underscores Cinven’s commitment to Ufinet and builds on its successful track record of investing in the business through prior Cinven Funds. Enel, that has been a minority co-shareholder in Ufinet since 2018, will re-invest a minority stake in the Group.

Ufinet leases optical fibre infrastructure (‘dark fibre’ services) and provides transmission services (‘lit fibre’) which together comprise c. 90% of revenues. The business also provides other telecom infrastructure like Fibre to the Home (‘FTTH’) or small cells and associated value-added services.

Ufinet operates across 17 countries and more than 2,000 cities in Latin America including in Colombia, Panama, Guatemala and Costa Rica, providing fibre infrastructure and transmission services to telecom operators. Ufinet was established as an independent business in June 2014, following its demerger from Gas Natural Fenosa, the Spanish utility provider, and today employs c.1,400 people across Spain and Latin America.

During Cinven’s ownership, Ufinet has demonstrated significant growth including:

• Strong revenue and EBITDA growth increasing by c.500% and c.700% respectively;
• Successful buy and build with the completion and integration of 9 value-accretive acquisitions including Nedetel in Ecuador, NB Telecom and Netell in Brazil, among others;
• Consistent investment in network improvement and expansion, growing its fibre network by three times and maintaining network performance levels well above industry requirements; and
• Job creation with the number of Ufinet employees growing by more than 1,400% from less than 100 employees to c. 1,400.

Cinven’s Iberia and TMT teams believe Ufinet is a compelling investment opportunity given its:

• Strong structural growth drivers, given the significant increase in businesses transitioning to using high speed connectivity, driving further demand for fibre;
• Operations in nascent markets with strong growth trajectories, underpinned by increased usage and penetration of fixed / mobile broadband and data centres;
• Significant international expansion and buy and build opportunities, building on its strong track record of successful geographic and acquisitive growth;
• Strong financial performance, with profits growing at nearly 30% per annum since 2018, including robust performance throughout COVID-19, demonstrating the resilience of the business model;
• Significant ‘first mover’ advantage, given its well-invested and extensive fibre network; and
• Industry-leading management team led by CEO, Iñigo Garcia del Cerro Prieto, who has successfully executed the growth strategy of the business since its independence from Gas Natural Fenosa.

Commenting on the transaction, Jorge Quemada, Partner at Cinven, said:

“Ufinet has significant long term strategic ambitions to expand and further internationalise its business, given the strong market dynamics driving the increased use of fibre. Cinven has successfully invested in Ufinet before – as well as in telecom providers in other markets, including Ziggo, Numéricable and MasMovil in the Netherlands, France and Spain, respectively. The Cinven team understands the telecom industry extremely well and, combined with the regional expertise of the Cinven Iberia team, continues to see compelling growth opportunities for Ufinet through a combination of market expansion, organic growth and further buy and build.

Cinven is delighted to continue its strategic partnership with Enel in support of Ufinet’s next phase of growth. In addition, the Cinven team is excited to back the first-class management team, led by Iñigo Garcia del Cerro Prieto, who has already executed a highly successful growth strategy for Ufinet over the past seven years.”

Iñigo Garcia del Cerro Prieto, CEO of Ufinet, added:

“We have had the privilege of working alongside Cinven and Enel since 2014 and 2018 respectively. With the renewal of their partnership, Ufinet strengthens its commitment to grow and expand the business, capitalising on the experience and scale of its shareholders to consolidate and increase its presence in the markets where it operates.

The transaction reinforces Ufinet’s long-term vision, enabling the Company to expand its footprint and become the largest neutral operator of telecommunications infrastructure in Latin America.”

Cinven’s previous successful investments in telecoms have included Ziggo, the leading cable operator in the Netherlands; Numéricable, the French cable operator, both successfully realised following significant buy and build strategies; and MasMovil, one of the largest telecoms operators in Spain which successfully acquired Euskaltel in 2021.

The transaction will be subject to certain regulatory approvals.

Advisers to Cinven on the transaction included Natixis (M&A), Deloitte (tax), Altman Solon (commercial due diligence), KPMG (financial due diligence) and Freshfields (legal).