EQT exits Adamo

Deal Handshake

EQT is offloading Spanish fibre operator Adamo to a fellow private equity outfit some five years after it bought the asset, and reports suggest it has made a few Euros in the process.

EQT Private Equity confirmed that has brokered a deal to sell Adamo Telecom to Ardian Infrastructure, but declined to share financial details. Subject to the usual closing conditions, including regulatory approvals, the deal should close in the first quarter of next year, it said.

The firm waxed lyrical about Adamo’s growth trajectory under its stewardship. EQT bought a majority stake in Adamo in 2017, leaving around 20% in the hands of the firm’s management team and founder and CEO Fredrik Gillström. At the time Adamo, whose focus is on connecting customers in rural areas, had a fibre network covering around 100,000 homes in the Cataluña region.

Now the firm can claim 1.8 million homes passed across Spain, on the back of organic growth and network acquisitions. Perhaps most crucially, it has modified its operating model; having once served solely as a retailer, it now styles itself as an open access platform, claiming four out of five of Spain’s national operators as customers, as well as 160 local operators.

We don’t know how much EQT paid for Adamo five years, but it’s a safe bet to suggest that it was less than the “around €1 billion” the Spanish press is reporting it has brought in from its sale.

One news outlet, Cinco Dias, even claims the telco’s price tag rose north of €1 billion due to interest from Macquarie-backed Onvia. The industry had previously predicted a sale at around the €800 million mark.

While it seems that EQT may have made some money from the deal, there is clearly still plenty of potential left in Adamo, given the level of interest the sale process reportedly attracted. Investment firms Infravia and GI Partners were often named as possible buyers for the fibre firm, while Lyntia, a fellow Spanish fibre wholesaler, was also said to be sniffing around.

Ardian clearly won out in the end, and it too must be happy with its chances of generating a return on investment on that €1 billion – or thereabouts – outlay.

And it’s not the only one. The Adamo deal is part of a much broader trend of investors picking up infrastructure assets, which promise long-term, reliable returns. While Ardian has acquired Adamo in its entirety, we are also starting to see telecoms operators hiving off their fibre infrastructure assets to bring in some cash, in much the same way as they have been doing with towers assets for a longer period.

Indeed, only last week it emerged that Telefonica is considering selling off a chunk of its fibre infrastructure in Spain, a move that could bring in somewhere in the region of €5 billion. There are doubtless multiple private equity and investment firms keeping a close eye on that potential deal too.

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