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EQT acquires Ventelo

by Jonathan Braude | Published December 21, 2011 at 11:53 AM

Swedish private equity firm EQT Partners AB agreed Wednesday, Dec. 21, to acquire Oslo-based data and telecom provider Ventelo Holding AB for an enterprise value of 3.6 billion Norwegian kroner ($606 million) as it embarks on an ambitious plan to boost broadband speeds and take on the market leader in Norway.

The Stockholm investor said its EQT VI fund would acquire Norway's No. 2 national fiber-optic network provider from its six regional power company owners and their telecommunications subsidiaries, for an equity value of up to Nkr1.8 billion.

The sellers are power companies Bergenshalvoens Kommunale Kraftselskap AS; Troms Kraft AS; Agder Energi AS; Nord-Trøndelag Elektrisitetsverk Holding AS; Eidsiva Bredbånd, the Internet subsidiary of Eidsiva Energi AS; and Lyse Energi AS-owned cable provider Altibox AS. Each of the selling shareholders, which earlier this year brought in Norwegian investment bank First Securities AS to find a buyer for Ventelo, owns 16.67% of the company.

In a separate statement, BKK executive director Birthe Iren Grotie said the shareholders had each developed very different strategies for the telecom business and this made it "difficult to develop Ventelo ... in a positive way."

EQT's ambitions to strengthen the business would mean that Ventelo would "act more aggressively in the market" than it does under its present owners, Grotie added.

Setting out its strategy, however, EQT said it would invest in improving the country's high-speed fiber network and build a strong challenger (to market leader Telenor ASA). It said that Norwegian companies and institutions are currently saddled with inferior data speed and capacity compared with most residential subscribers.

The private equity firm will bring in its industrial partner Gunner Asp to chair Ventelo. Asp also chairs the Oslo-area fiber network provider Infiber AS, formerly Hafslund Fibernett AS, which EQT bought for Nkr1.48 billion in January.

No one from EQT was immediately available either to explain whether the firm planned to merge Ventelo and Infiber at a later date or to set out the deal's financial structure. However, one of the sellers, Eidsiva, gave the enterprise value in a separate news release.

Ventelo is Norway's second-largest provider of data and telecom services, with 16,000 business customers and 80,000 residential subscribers. It operates one of only two nationwide optical-fiber networks with 17,000 kilometers of backbone cabling and large regional and metropolitan area networks. The company forecasts 2011 revenues at Nkr2.6 billion and Ebitda at about Nkr400 million.

Ventelo and its shareholders received financial advice from First Securities, the Norwegian arm of Swedish lender Swedbank AB, and legal counsel from Oslo law firm Advokatfirmaet Selmer DA.

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