Warburg Pincus sells Poland's INEA to Macquarie

Tuesday, December 5th, 2017 
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Warburg Pincus Announces Sale of INEA to Macquarie European Infrastructure Fund 5

LONDON — Warburg Pincus, a global private equity firm focused on growth investing, today announced that funds affiliated with the firm have entered into a definitive agreement to sell their majority stake in INEA (“the Company”), the fibre-to-the-home (FTTH) and cable operator in Western Poland, to Macquarie European Infrastructure Fund 5 (MEIF5), managed by Macquarie Infrastructure and Real Assets (MIRA), the leading global infrastructure investor. Terms of the transaction were not disclosed.

Founded in 1992 and headquartered in Poznan, Poland, INEA offers triple and quadruple-play telecommunications services to its residential and business customers, including cable TV, broadband, fixed and mobile telephony. Warburg Pincus initially invested in INEA in 2013 when the firm acquired a strategic minority stake in the Company and subsequently acquired a majority position in the Company to support the ongoing growth of the business. Under Warburg Pincus’ ownership, INEA constructed a 4,500 km fibre optic backbone network (Wielkopolska Sieć Szerokopasmowa) and increased its last mile network footprint from 360k Homes Passed (“HP”) to 500k HP, with further 200k HP expansion already contracted with support of EU funds. As a result, Wielkopolska enjoys today the best quality telecom infrastructure in Poland.

Thanks to very substantial capital expenditure during Warburg Pincus’ ownership, INEA rapidly modernized and expanded its network and became the fastest broadband provider in the country, offering commercially 1,000 Mb/s download speeds. INEA’s internet quality became the best in the country as testified by independent studies. The Company’s EBITDA doubled since Warburg Pincus’ investment, driven by healthy growth of revenue and margins. In the last four years, INEA implemented numerous initiatives leading to higher cross-sell of services, higher service quality, and more streamlined processes. INEA also relocated its headquarters, became a name sponsor of Lech Poznan stadium (now called INEA Stadion), launched Lech TV and expanded its product portfolio with colocation and hosting services served from its newly built data centre in Wysogotowo. Finally, during Warburg Pincus’ ownership, a new infrastructure wholesale strategy has been finalized and put into practice, which creates multiple growth avenues for the future outside of Wielkopolska.

Janusz Kosinski, President of the Management Board and co-founder of INEA, commented, “We are pleased at the progress we have achieved through our partnership with Warburg Pincus. I have truly enjoyed a multi-dimension support from Warburg Pincus and look forward to partnering with Macquarie and leveraging their strong telecommunications infrastructure experience to support INEA’s further growth.”

Adarsh Sarma, Managing Director, Warburg Pincus, commented, “We are proud of the transformative investments and significant network expansion completed during our ownership of INEA. The Company is very well positioned for future growth, and we wish Janusz and the entire INEA team continued success. As growth investors, we feel privileged to have supported INEA in building the best quality operator with the best infrastructure in the country.”

Leigh Harrison, European Head of Macquarie Infrastructure and Real Assets, said, “As one of the largest fibre-to-the-home (FTTH) and cable network operators in Western Poland, INEA has successfully built a best in class network that delivers essential telecommunications services to the community. With considerable potential to expand the business we are delighted to work alongside INEA’s current management to continue strengthening its position as the preferred telecommunications infrastructure access and service provider in the region.”

Links: Warburg Pincus; Macquarie; INEA